USDCAD TECHS: Pullback Appears Corrective

• Guidance: MS+39bps area
• Issue size: Benchmark (MNI expects E3bln)
• Maturity: 14 October 2033
• Coupon: Long First Coupon
• ISIN: TBC

• Issue size: Benchmark (MNI expects E1-2bln)
• Guidance: MS+112bps area
• ISIN: PTOTE3OE0025

• Settlement: 30-September-2025 (T+5)
• Bookrunners: Barclays(B&D/DM)/BNPP/CAIXABI/CITI/CACIB/JPM
• Timing: Book’s open, today’s business

• RES 4: 6812.29 2.382 proj of the Aug 20 - 28 - Sep 2 price swing 
• RES 3: 6800.00 Round number resistance 
• RES 2: 6787.63 1.382 proj of the Aug 1 - 15 - 20 price swing   
• RES 1: 6756.75 High Sep 22  
• PRICE: 6751.75 @ 07:52 BST Sep 23
• SUP 1: 6616.34 20-day EMA
• SUP 2: 6577.25 Low Sep 10 
• SUP 3: 6497.54 50-day EMA 
• SUP 4: 6417.25 Low Aug 12 

A bull cycle in S&P E-Minis remains intact and the contract traded to a fresh cycle high yesterday. Price has breached the 6700.00 handle and this signals scope for an extension towards 6787.63, a Fibonacci projection point. Moving average studies remain in a bull-mode position, highlighting a dominant uptrend and positive market sentiment. Initial support to watch lies at 6616.34, the 20-day EMA.

The September flash PMIs headline this week’s regional calendar. Consensus expects the composite PMI to inch up to 51.1 from 51.0 in August, driven by a small uptick in the manufacturing component to 50.8 (vs 50.7 prior). Services is expected to remain at 50.5, after printing at 51.0 in July.  The Eurozone-wide composite PMI has been gradually improving in recent months, but this has largely been a function of a recovery in manufacturing. While welcomed after several years of manufacturing malaise following the Russian invasion of Ukraine, the services sector is much more important in terms of total value added.  A deterioration in services sentiment (and by extension actual activity) would be one pre-requisite for another rate cut this cycle.

• German and French PMI data will be released before the Eurozone-wide reading, with consensus expecting a small uptick in Germany but a downtick in France. It will be interesting to see how the latest wave of political uncertainty impacts the French data. INSEE business confidence was steady in September.
• ECB-dated OIS price 3bps of easing through year-end and 11.5bps of cuts through July 2026.
• Euribor futures are flat to +1.0 ticks through the blues, inching away from session lows in early trade.
• Yesterday afternoon, Bundesbank President Nagel said he wasn’t concerned with the current valuation of the euro. He noted that broader effective exchange rates have seen smaller appreciations than EURUSD spot this year. However, the ECB’s nominal effective exchange rate is nonetheless at all-time highs.
• ECB’s Muller, Kocher and Cipollone are scheduled to speak today.