US DATA: Richmond Fed Surveys Point To Future Weakness, Higher Prices (1/2)
The Richmond Fed released two surveys for the Fifth District that were consistent with recessionary conditions, with both the manufacturing and services sectors showing signs of significant weakness in April amid rising price pressures. The surveys, which mirror deteriorations in other regional Fed indices for April amid tariffs impacting, cover a region encompassing Washington D.C., Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.
- Starting with manufacturing, the Fifth District index fell to -13 in April from -4 prior (and worse -7 survey), representing a 5-month low. The three indices that make up that composite - shipments, new orders, and employment - each fell further.
- In the biggest warning sign, expectations for local business conditions continued to collapse: at -37.0 from -22.0 prior and positive 40.0 as recently as December. That marks an all-time low for the survey.
- Indeed most forward-looking indicators were increasingly negative, including for future local business conditions, shipments and new orders.
- And at the same time, inflation expectations soared: expectations for prices paid over the next 12 months rose to 8% (non-seasonally adjusted), an all-time high (going back to at least 2000), with expected prices received up to 6.0% (just below the all-time 7% high). Current (over past 12 months) prices paid/received rose less dramatically but were still very elevated at 23- and 16- month highs, respectively.
- In short, this was a very stagflationary report for regional manufacturing.
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CANADA PM CARNEY TO MEET GOVERNOR GENERAL AT NOON
- CANADA PM CARNEY TO MEET GOVERNOR GENERAL AT NOON
- CARNEY EXPECTED TO SEEK ELECTION
US TSYS: Available "Extraordinary Measures" Pick Up Slightly From Lows
Treasury has $163B of "extraordinary measures" remaining for authorities to use to fend off hitting the debt limit as of March 19, per the latest release of Treasury data. That's up from $86B on Mar 17 and a low of $34B on Feb 24.
- That's a little under half of the $377B in measures available to Treasury, with most of the amount remaining ($143B) coming from the so-called "G Fund".
- This headroom is in addition to $416B in cash left in the TGA, at last count.
- We haven't seen any changes recently to "x-dates" by when Treasury will run out of cash until the debt limit is lifted.
- Consensus still centers around late July/early August, but much will depend on April's major mid-month tax take. Treasury wrote to Congress last week that they would be able to provide an update on the x-date in the first half of May, after the conclusion of tax season.
USDCAD TECHS: Short-Term Outlook Remains Bullish
- RES 4: 1.4793 High Feb 3 and key resistance
- RES 3: 1.4700 Round number resistance
- RES 2: 1.4641 76.4% retracement of the Feb 3 - 14 bear leg
- RES 1: 1.4452/4543 High Mar 13 / 4 and a bull trigger
- PRICE: 1.4345 @ 16:27 GMT Mar 21
- SUP 1: 1.4242 Low Mar 6 and a key near-term support
- SUP 2: 1.4151/4107 Low Feb 14 / 50.0% of Sep 25 - Feb 3 bull run
- SUP 3: 1.4011 Low Dec 5 ‘24
- SUP 4: 1.3944 61.8% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
USDCAD is trading closer to its recent lows. The bull cycle that started Feb 14 remains intact and moving average studies remain in a bull-mode position, highlighting a dominant uptrend. Note that the latest pullback has exposed a near-term key support at 1.4242, the Mar 6 low. Clearance of this level would undermine the bull theme and instead highlight potential for a test of 1.4151, the Feb 14 low and a bear trigger. The bull trigger is 1.4543, the Mar 4 high.
