LATAM FX: Price Signal Summary - USDBRL Bulls Remain In The Driver’s Seat
Jun-05 13:13
- USDMXN has traded sharply this week, as the pair extends the reversal that started May 21. The rally this week cancels a recent bearish theme and has resulted in price trading through 17.5698, 61.8% of the Apr 19 - May 21 downleg. Note that 17.8159, the 76.4% retracement point, has also been cleared. This opens 18.2137, the Apr 19 high. Support to watch lies at 16.9048, the 20-day EMA. Initial support is Tuesday’s low of 17.5462.
- USDBRL bulls remain in the driver’s seat. This week’s bullish extension reinforces this theme. Yesterday’s gains resulted in a print above key resistance at 5.2869, the Apr 16 high and bull trigger. A clear break of this hurdle would confirm a resumption of the uptrend and open 5.3330, 76.4% of the Nov 17 ‘22 - Jul 28 ‘23 bear cycle. On the downside, initial support to watch lies at 5.1736, the 20-day EMA.
- A bear trend in USDCLP remains intact and recent bearish price action reinforces current conditions. The latest recovery appears to be a correction - for now. The 20-day EMA has been pierced. The next Important resistance is seen at 928.69, the 50-day EMA. For bears, the break in early May of support at 935.63, the Mar 15 low, marked an important technical breach and highlighted a stronger reversal. 886.96, the 76.4% retracement of the Dec 1 ‘23 - Feb 26 bull leg, has been pierced. A clear break would open 870.45, the Dec 29 low.
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FOREX: Lower Core Yields Prompting Moderate Yen Recovery, Greenback Softens
May-06 12:59
- Core Fixed income heading modestly higher has allowed the Japanese Yen to reverse a portion of the overnight weakness in recent trade with USDJPY briefly paring the overnight advance by around 60 pips amid the holiday thinned US session.
- US 5-year yields declining by 4bp on the day are weighing on the greenback, with EURUSD and GBPUSD extending session highs and keeping Antipodean FX among the best performers in G10, benefiting overnight from stronger Chinese equity markets.
- The RBA is widely expected to leave rates at 4.35% at its May decision on Tuesday. There is some chance that the tightening bias will be reinstated following the higher-than-expected Q1 CPI data, however, we believe that is unlikely.
- AUDUSD traded firmly higher Friday and in the process breached resistance at 0.6587, the Apr 29 high. The break of this hurdle cancels a recent bearish threat and highlights a resumption of the bull leg that started Apr 19. This initially opens 0.6668, the Mar 8 high.
FRANCE T-BILL AUCTION RESULTS: 13/17/27/50-week BTFs
May-06 12:54
| Type | 12-week BTF | 17-week BTF | 27-week BTF | 50-week BTF |
| Maturity | Jul 31, 2024 | Sep 4, 2024 | Nov 14, 2024 | Apr 24, 2025 |
| Amount | E3.197bln | E396mln | E1.894bln | E1.698bln |
| Target | E2.8-3.2bln | E0-0.4bln | E1.5-1.9bln | E1.3-1.7bln |
| Previous | E3.296bln | E399mln | E1.593bln | E1.695bln |
| Avg yield | 3.803% | 3.718% | 3.666% | 3.460% |
| Previous | 3.800% | 3.728% | 3.710% | 3.488% |
| Bid-to-cover | 2.62x | 5.51x | 2.76x | 3.19x |
| Previous | 2.39x | 8.21x | 3.4x | 3.57x |
| Previous date | Apr 29, 2024 | Apr 15, 2024 | Apr 29, 2024 | Apr 29, 2024 |
STIR: BLOCK, Red Dec'25 SOFR Put Fly
May-06 12:25
- 7,000 SFRZ5 93.75/94.25/94.75 put flys, 5.0 ref 95.915 at 0817:06ET
