LATAM FX: Regional Currencies On Backfoot Ahead Of Tariff Announcement
Mar-26 19:52
- Regional currencies have traded with a weaker tone on Wednesday as headlines that suggest President Trump is preparing a statement on auto import tariffs have lent support to the US dollar. Trump is due to make an announcement on auto tariffs at 2000GMT(1600ET).
- USDMXN has risen by 0.5% to around 20.15, keeping the pair 0.4% lower on the week, as the peso’s momentum has been checked by the markets assessment of the upcoming Banxico decision and looming tariff headlines. Resistance to watch is 20.2980, the 50-day EMA, while support is seen at 19.8473, the Mar 14 low.
- USDBRL has also risen by 0.5% to 5.73, leaving the pair broadly unchanged on the week. Initial resistance is at 5.8017, the 50-day EMA, while support is at 5.6755, the Feb 18 low and a short-term bear trigger.
- CIBC says that while unanchored inflation expectations suggest we could still see a repricing higher in rates, they expect the BRL’s high carry to act as a deterrent against a sustained USD/BRL move above 6.10, rather than provide ammunition for a further BRL rally going forward.
- Meanwhile, USDCLP has unwound initial losses to trade 0.5% higher on the day at 926, as copper has given up some of its earlier gains. A downtrend in USDCLP remains intact, with sights on 891.28, the Sep 27, 2024 low. The 20-day EMA, an initial resistance, is at 932.04.
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US STOCKS: Late Equities Roundup: Pharmaceuticals, Financial Services Leading
Feb-24 19:44
- Stocks are trading near steady (SPX Eminis) to mixed late Monday, the DJIA outperforming after falling to the lowest level since early January in the first half (43,343.67), the Nasdaq weaker but off morning lows (19,275.46 - lowest since the beginning of the month).
- Currently, the DJIA trades up 180.66 points (0.42%) at 43608.99, S&P E-Minis steady at 6029, Nasdaq down 101.9 points (-0.5%) at 19421.86.
- Stocks extended lows midmorning on President Trump trade policy concerns while trading desks cited managed money rotation out of stocks into Fixed Income. Treasury safe haven support saw rates reverse early losses to moderately higher in 5s to 30s.
- Health Care and Financial sectors continued to lead gainers in late trade, carry-over support from Friday noted in pharmaceuticals amid concerns over a new Covid strain with "pandemic potential": Charles River Laboratories +4.56%, Bristol-Myers Squibb +3.26%, West Pharmaceutical Services+3.23% and Baxter International +3.15%.
- Insurance companies buoyed the Financials sector: Travelers Cos +3.67%, Progressive Corp +3.31% and American International Group +2.67%.
- Meanwhile, Utilities and Information Technology sectors underperformed: Constellation Energy -6.44%, Vistra -5.18% and NRG Energy -1.91%. Technology sector shares were hampered by the threat of tariffs weighing on foreign investment: Palantir Technologies -9.30%, Constellation Energy -6.13%, Arista Networks -5.44% and Super Micro Computer -5.21%. Microsoft declined 1.04% on reports they canceled some leases for domestic data center capacity.
USDJPY TECHS: Bears Remain In The Driver’s Seat
Feb-24 19:30
- RES 4: 154.80 High Dec 12 ‘24 and a key resistance
- RES 3: 153.70 50-day EMA
- RES 2: 152.62 20-day EMA
- RES 1: 150.74 High Feb 21
- PRICE: 149.21 @ 15:56 GMT Feb 24
- SUP 1: 148.85 Low Feb 24
- SUP 2: 148.65 Low Dec 3 ‘24 and a key support
- SUP 3: 148.01 Low Oct 9 ‘24
- SUP 4: 146.95 61.8% retracement of the Sep 16 ‘24 - Jan 10 bull leg
USDJPY bears remain in the driver’s seat and the pair again traded to a fresh short-term cycle low. The move down has exposed the next key support at 148.65, the Dec 3 ‘24 low. A break of this level would strengthen a bearish condition and pave the way for an extension towards 146.95, a Fibonacci retracement. On the upside, initial firm resistance to watch is 152.62, the 20-day EMA.
USDJPY TECHS: Bears Remain In The Driver’s Seat
Feb-24 19:30
- RES 4: 154.80 High Dec 12 ‘24 and a key resistance
- RES 3: 153.70 50-day EMA
- RES 2: 152.62 20-day EMA
- RES 1: 150.74 High Feb 21
- PRICE: 149.21 @ 15:56 GMT Feb 24
- SUP 1: 148.85 Low Feb 24
- SUP 2: 148.65 Low Dec 3 ‘24 and a key support
- SUP 3: 148.01 Low Oct 9 ‘24
- SUP 4: 146.95 61.8% retracement of the Sep 16 ‘24 - Jan 10 bull leg
USDJPY bears remain in the driver’s seat and the pair again traded to a fresh short-term cycle low. The move down has exposed the next key support at 148.65, the Dec 3 ‘24 low. A break of this level would strengthen a bearish condition and pave the way for an extension towards 146.95, a Fibonacci retracement. On the upside, initial firm resistance to watch is 152.62, the 20-day EMA.
