US DATA: Richmond Fed Surveys Point To Future Weakness, Higher Prices (2/2)
The Richmond Fed's Fifth District Survey of Service Sector Activity meanwhile showed the weakest composite reading (-30.0, -14.0 prior) since July 2022 and before that, April/May 2020. The 6-month outlook likewise fell to -29.0 (-5.0 prior), effectively meaning the two series have converged at multi-year lows.
- This was a soft report across the board, with the indices for revenues and demand, as well as their respective expectations indices, falling in the month.
- The employment index remained positive but the forward-looking index fell sharply (to 1 from 12), with both current and future wage indices decelerating but still very much in positive territory.
- The prices portion of the survey showed an interesting divergence: prices received actually fell in the month to the lowest since April 2021 at 3.0%, while prices paid were fairly steady at 4.9%. Looking ahead, expected prices received likewise was steady at one-year highs of 4.2%, but expected prices paid rose to 5.9% from 5.1%, highest since January 2023.
- Evidently, price pressures had been dissipating for regional service firms coming into April, but firms were concerned that inflation in future receipts would not keep pace with input price rises.
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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.
