OUTLOOK: Price Signal Summary - WTI Bull Cycle Extends
- On the commodity front, Gold traded higher again yesterday and in the process managed to trade through resistance at the 50-day EMA. The average intersects at $1944.4 and the break signal scope for a continuation of the current corrective cycle. This opens $1968.00, the Jun 16 high. Key resistance has been defined at $1985.3, the May 24 high where a break would highlight a stronger reversal. Key support and the bear is at $1893.1, the Jun 29 low. Initial support is at $1931.70, the 20-day EMA.
- In the oil space, the current bull cycle in WTI futures remains intact. The contract has recently breached $72.72, the Jun 21 high and yesterday’s move higher resulted in a break of key resistance at $75.70, the Jun 5 high. This strengthens bullish conditions and paves the way for a climb towards $78.03, the 76.4% retracement of the Apr 12 - May 4 bear leg. Key short-term support has been defined at $66.96, the Jun 12 low. Initial support is at $71.83, the 20-day EMA.
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US 10YR FUTURE TECHS: (U3) Bearish Outlook
- RES 4: 115-29+ High May 17
- RES 3: 115-19 High May 18
- RES 2: 115-00 High Jun 1 and a key resistance
- RES 1: 114-06+ / 114-25+ High Jun 6 / 50-day EMA
- PRICE: 113-17 @ 11:13 BST Jun 13
- SUP 1: 112-29+ Low May 26 / 30 and key support
- SUP 2: 112-16 76.4% retracement of the Mar 2 - May 4 rally
- SUP 3: 112-00 Low Mar 10
- SUP 4: 111-14+ Low Mar 9
Treasury futures are consolidating closer to recent lows and attention is on support at 112-29+, the May 26 / 30 low. The outlook is bearish following the reversal engulfing candle pattern on June 2 and the subsequent move lower. Clearance of 112-29+ would resume the trend that started May 4 and open 112-16+, a Fibonacci retracement. Initial firm resistance is at 114-06+, the Jun 6 high.
STIR: Still +6.5bps Priced For Tomorrow’s FOMC Pre-CPI
- FOMC-dated OIS implied rates are relatively little changed from yesterday’s close, with a reasonable push higher from strong UK labour data only unwinding weakness through Asia hours.
- With CPI in the crosshairs, there is still +6.5bps priced for tomorrow’s FOMC decision and a cumulative +22bps to a terminal 5.30% effective in July before 24bp of cuts to year-end.
- Cumulative changes: +6.5bp Jun (+0.5bp on the day), +22bp Jul (unch), +20.5bp Sep (+0.5bp), +11.5bp Nov (unch), -2bp Dec (-1bp) and -18bp Jun (+2.5bp).
NORWAY: Labour Reaches Deal With Socialist Left Party On Revised 2023 Budget
Norway's governing centre-left Labour Party has confirmed that is has reached and agreement with the leftist Socialist Left Party (SV) to gain its approval for a revised 2023 budget. Public broadcaster NRK reports that the minority Labour gov't, propped up by the agrarian regionalist Centre Party, has pledged an additional NOK2bn (USD190mn) per annum towards child benefit at the behest of the SV.
- The agreement also sees an additional NOK300mn (USD27.7mn) set aside for climate change related spending, a 10% increase in the social assistance rate, an NOK138mn (USD12.7mn) increase in public transport expenditure in 2023, among other measures.
- Gaining the support of SV was crucial to ensure the budget passes in the Norwegian Parliament (Storting). The Labour-Centre gov't holds just 76 seats in the 169-member legislature. But with the SV's additional 13 seats, this lifts the total to 89, above the 85 seat majority threshold.
Source: stortingnet.no, MNI
