OUTLOOK: Price Signal Summary - USDJPY Bulls Remain In The Driver's Seat
Aug-17 09:54
- In FX, the trend needle in EURUSD continues to point south and the pair is trading lower today, extending the current bear cycle. Support at 1.0912, the Aug 3 low, has recently been cleared. This confirmed a resumption of the bear cycle that started Jul 18 and opens 1.0834 next, the Jul 6 low and a key level. Price is also trading lower inside a bull channel drawn from Mar 15. The base lies at 1.0756. Key short-term resistance is 1.1065, the Aug 10 high. Initial resistance is at 1.0974, the 20-day EMA.
- GBPUSD is trading in a range for now. The trend condition remains bearish and the Aug 14 low of 1.2621 marks the short-term bear trigger. A break would confirm a resumption of the downtrend and pave the way for a test of the next objective at 1.2591, the Jun 29 low and the next important support. On the upside, key short-term resistance has been defined at 1.2819, the Aug 19 high. A break would signal a possible reversal.
- The uptrend in USDJPY remains intact and the pair continues to climb. Recent gains resulted in the break of 145.07, the Jun 30 high. This confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode condition, highlighting current positive sentiment. The focus is on 147.49 next, the 2.00 projection of the Jul 14 - 21 - 28 price swing. Initial firm support to watch is 143.35, the 20-day EMA.
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WHEAT: Kremlin Warns Against Black Sea Grain Exports Without Deal In Place
Jul-18 09:37
Comments from the Kremlin hitting wires warning that a potential plan by Ukraine and Turkey to continue operating Black Sea grain exports would carry "risks" without security guarantees in place from Russia as the "relevant waters are used by Ukraine for military activities."
- The Kremlin pushed back against statements from the US and EU yesterday which were critical of Moscow's decision to withdraw from the deal saying, "Moscow fulfilled its obligations."
- US Secretary of State Antony Blinken yesterday countered Moscow’s claims that the deal unreasonably hindered Russian agriculture exports, saying: “As we have consistently made clear, no G7 sanctions are in place on Russian food and fertilizer exports.”
- Blinken said that, in the absence of a formal deal, “we’ll look at what else can be done to find other ways to get Ukrainian food products on the world market,” but conceded that “it's really hard to replace what’s now being lost as a result of Russia weaponizing food.”
- Kremlin spokesperson Dmitry Peskov said yesterday that Russia would resume participation “as soon as the relevant agreements are fulfilled,” but today's comments failed to provide clarity on conditions which need to be met.
GERMAN AUCTION RESULTS: 3.10% Sep-25 Schatz
Jul-18 09:34
| 3.10% Sep-25 Schatz* | Previous | |
| ISIN | DE000BU22023 | DE000BU22015 |
| Allotted | E4.963bln | E4.488bln |
| Avg yield | 3.07% | 3.15% |
| Bid-to-offer | 1.22x | 1.18x |
| Bid-to-cover | 1.47x | 1.45x |
| Average Price | 100.059 | 99.338 |
| Low acc. Price | 100.055 | 99.335 |
| Pre-auction mid | 99.329 | |
| Previous date | 20-Jun-23 | |
| Total sold | E6bln | E5.5bln |
BONDS: EGB-Led Global Rally As ECB Hikes Priced Out
Jul-18 09:24
EGB yields have fallen sharply in early trade Tuesday, pulling down Treasury and Gilt yields with them.
- The catalyst for the EGB move was uncharacteristically dovish commentary by ECB hawk Knot who sounded unconvinced about the need for hikes past next week's near-certain 25bp raise (tightening beyond this month "would at most be a possibility but by no means a certainty").
- The comments knocked 5bp off the market- implied ECB terminal policy rate and saw the German curve bull steepen with Schatz yields down double-digits.
- Periphery EGB spreads tightened on prospects of a less hawkish ECB, with 10Y BTP/Germany hitting tights not seen since Jun 28 (163bp).
- The EGB moves triggered a rally in Treasuries, led by the curve belly, with 10Y yields hitting the lowest levels since June (a touch below 3.75%).
- Gilt gains were briefly pared by a weak long-dated auction, but subsequently recovered.
- US data is the focus for the rest of the session, with retail sales, industrial production, inventories, and homebuilder sentiment featuring.
Latest levels:
- Sep US 10Y futures (TY) up 8/32 at 112-31 (L: 112-19.5 / H: 113-2.5)
- Sep Bund futures (RX) up 82 ticks at 133.81 (L: 133.08 / H: 133.97)
- Sep Gilt futures (G) up 88 ticks at 95.63 (L: 95.2 / H: 95.67)
- Italy / German 10-Yr spread 3.7bps tighter at 163.7bps
