CHILE: Presidential Front-Runners Losing Support, BCCh Decision Next Week
Oct-24 10:58
- USDCLP had a notable close below 945 on Thursday after printing a fresh 3-month low. The peso was buoyed by the strong price action for copper futures, and the technical breach could signal scope for a more forceful move ahead, towards the July lows of 922.67.
- Chilean presidential front-runners Jeannette Jara and José Antonio Kast both suffered significant drops in voting intentions, according to a new poll published less than a month before the first round vote. (BBG)
- Jara saw her backing for the fall to 32.7% from 38.9% in September, according to LatAm Pulse, a survey conducted by AtlasIntel for Bloomberg News and published Friday. Right-wing contender Kast followed with 20.1%, down from 24.7% previously. Both are still seen progressing to the second-round runoff, where Kast is expected to triumph by 47% to 39%.
- September PPI data is due today, the last data point before the BCCh is expected to hold the reference rate steady at 4.75% next Tuesday, as the board continues to closely monitor the evolution of core inflation and its fundamentals.
- While September inflation data confirmed an expected uptick, analysts have pointed out that the core reading was marginally below the central bank’s more hawkish estimates. This should keep a December rate cut firmly on the table, a view echoed by both BCCh economist and trader surveys.
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CROSS ASSET: Bonds and FX Month End Extensions
Sep-24 10:57
Bloomberg Bonds projection:
- US Tsys: +0.06yr (small).
- EU Govies: +0.08yr (average).
- UK Govies: 0.00yr (non event).
Barclays FX:
- Their passive Month-End and Quarter-End rebalancing model shows moderate USD selling against all majors.
SNB: MNI SNB Preview - September 2025: Avoid Negativity
Sep-24 10:56
Repeat send from yesterday.
- Markets and analysts see a hold at 0.00% at Thursday's meeting as most likely, with a cut into negative territory appearing improbable given inflation has remained within the SNB's defined range of price stability for three months now.
- US tariffs at 39% remain of some concern for the Swiss economy leading to downside pressure on GDP estimates but should not move the needle for near-term SNB policy.
- The rates outlook is likely to continue to be characterized by a high bar to further cuts into negative territory, a comment on that may or may not make it into the press statement but will anyways be discussed in the subsequent media conference.
- The SNB's FX communications paragraph is likely to remain materially unchanged given a limited move in the trade-weighted CHF since the June meeting.
- For the first time, additional colour on the governing board decision making process will be the provided four weeks after the meeting with the new meeting summaries.
US TSYS: Tsys Inside Ranges Ahead New Home Sales, US$ Climbing
Sep-24 10:45
- Treasuries are running steady to mixed, inside a narrow overnight range after 10s revisited last Thursday's closing levels. US$ climbing, Bbg index +4.48 at 1200.15 - early Monday levels.
- TYZ5 currently trades at 112-28 (+0.0) on cumulative volumes of 220k. 10Y yield +.0077 at 4.1138%.
- Moving average studies remain in a bull mode position, highlighting a dominant uptrend. The bull trigger has been defined at 113-29, the Sep 11 high. Otherwise, the pullback in Treasury futures appears corrective after TYZ5 moved through the 20-day EMA, at 112-28. The break signals scope for a deeper retracement and attention turns to the 50-day EMA, at 112.10 and the next key support.
- Lighter data on tap ahead a much busier Thursday: MBA Mortgage Applications (0700ET), New Home Sales (1000ET) along with Building Permits at some point today. Main focus is on Thursday's heavy data drop: Personal Consumption, GDP, Durables/Cap Goods, and weekly claims.
- Treasury supply: $28B 2Y FRN re-open (91282CNQ0) & $65B 17W bill auctions (1130ET), $70B 5Y Note Auction (91282CPA3) at 1300ET.
- Fedspeak: At 1610ET, SF Fed President Daly's economic outlook at the annual Spencer Fox Eccles Convocation at the University of Utah’s School of Business, moderated Q&A follows.
- Politics: President Trump's schedule is muted today after speaking at the at the United Nations yesterday, largely closed press items. Unscheduled social media posts always a potential market mover, however.
