ECB VIEW: RBC Drop Final ECB Cut, See Debate About Hikes Developing
Jul-24 17:11
- RBC write that the ECB "surprised with a more hawkish press conference than the market was positioned for."·
- "Most importantly, Lagarde sounded notably constructive on euro area growth and signaled clearly that the ECB is prepared to look through temporary inflation weakness."
- "We are now changing our ECB call to no further rate cuts with a terminal rate at 2%. The main risk is a major escalation in the EU-US trade war."
- "With still close to a full rate cut priced, we see risks of further reduction in the coming weeks and even a debate about rate hikes developing. We have been running Euribor curve steepeners for some time and reiterate that those appear attractive going into the end of the cutting cycle."
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US TSYS/SUPPLY: Review 2Y Note Auction: Small Stop
Jun-24 17:04
- Tsy futures remained bid (2Y Tsy near session low at 4.2965%) after the latest $69B 2Y note auction's (91282CNL1) small stop: 3.786% high yield vs. 3.788% WI; 2.58x bid-to-cover vs. 2.57x prior.
- Peripheral stats: Indirect take-up 60.5% from 63.3% prior, directs 26.33% vs. 26.20% prior, primary dealer take-up 13.17% vs. 10.5% prior.
- The next 2Y auction is tentatively scheduled for July 28.
FED: US TSY 2Y NOTE AUCTION: HIGH YLD 3.786%; ALLOTMENT 4.18%
Jun-24 17:02
- US TSY 2Y NOTE AUCTION: HIGH YLD 3.786%; ALLOTMENT 4.18%
- US TSY 2Y NOTE AUCTION: DEALERS TAKE 13.17% OF COMPETITIVES
- US TSY 2Y NOTE AUCTION: DIRECTS TAKE 26.33% OF COMPETITIVES
- US TSY 2Y NOTE AUCTION: INDIRECTS TAKE 60.50% OF COMPETITIVES
- US TSY 2Y AUCTION: BID/CVR 2.58
EURUSD TECHS: Trend Structure Cemented Bullish
Jun-24 17:00
- RES 4: 1.1783 1.764 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 3: 1.1696 1.618 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 2: 1.1685 76.4% retracement of the Jan ‘21 - Sep ‘22 downleg
- RES 1: 1.1641 High Jun 24
- PRICE: 1.1622 @ 16:34 BST Jun 24
- SUP 1: 1.1457 20-day EMA
- SUP 2: 1.1321/1.1210 50-day EMA and a pivot level / Low May 29
- SUP 3: 1.1131 Low May 16
- SUP 4: 1.1065 Low May 12 and a reversal trigger
The trend set-up in EURUSD remains bullish, reinforced by Monday’s gains. The recovery highlights the fact that the latest correction has been a shallow one and that support at the 20-day EMA - at 1.1457 - remains intact. Moving average studies continue to highlight a dominant uptrend and the breach of 1.1631 confirms a resumption of the trend. This opens 1.1685, a Fibonacci retracement.
