MEXICO: Sheinbaum In Guatemala, Economic Activity, Bi-Weekly CPI Next Week
Aug-15 10:59
- Focus ahead of President Trump’s meeting with Putin in Alaska is likely to continue to dominate sentiment today, with Trump set to leave the White House at 1145BST/0645ET and arrive in Alaska around 2000BST/1500ET, with the two beginning their meeting just ahead of today's close. Before then, US retail sales for July are the data highlight at 1330BST(0830ET), followed by industrial production and UoM sentiment.
- The Mexican domestic data calendar remains clear, with attention next week turning to June retail sales figures on Thursday, followed by the final Q2 GDP estimate, June economic activity and bi-weekly CPI on Friday. Last night, ANTAD same-store sales printed at 2.4% y/y in July, slowing from 4.7% in June.
- President Sheinbaum will travel to Guatemala today, where she will sign an accord to extend the Maya train. She is due to give a media briefing in Guatemala at 1945BST(1445ET).
- Against this backdrop, USDMXN is trading moderately lower around 18.73 ahead of the NY crossover, unwinding a portion of yesterday’s gains. Despite those gains, the trend needle in USDMXN continues to point south and the latest recovery is - for now - considered corrective. On the downside, sights remain on 18.4302, the Aug 1 ‘24 low, while a clearance of the 50-day EMA at 18.8527 is required to undermine the trend.
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OUTLOOK: Price Signal Summary - Bear Threat In Oil Futures Still Present
Jul-16 10:58
- On the commodity front, the bull cycle in Gold that started Jun 30, remains intact and the yellow metal is holding on to the bulk of its recent gains. Note that medium-term trend conditions are bullish - moving average studies are in a bull-mode position highlighting a dominant uptrend. An extension would expose $3395.1, the Jun 23 high, and $3451.3, the Jun 16 high. On the downside, the bear trigger is $3248.7, the Jun 30 low. First support to watch is 3282.8, the Jul 9 low.
- In the oil space, WTI futures maintain a bearish tone. The sharp reversal from the Jun 23 high continues to highlight scope for an extension lower and this suggests that recent gains have been corrective. Support to watch is the 50-day EMA, at $65.50. The average has been pierced, a clear break of it would expose $58.87, the May 30 low. Initial resistance to monitor is $71.20, the 50.0% retracement of the Jun 23 - 24 high-low range.
EQUITIES: Bank of America Macro Takeaways:
Jul-16 10:52
- "2Q NET INTEREST INCOME FTE $14.82B, EST. $14.84B - bbg
- 2Q NET INTEREST INCOME $14.67B, EST. $14.59B
- 2Q LOANS $1.15T, EST. $1.12T
- 2Q NET CHARGE-OFFS $1.53B, EST. $1.5B
- 2Q TRADING REVENUE EX. DVA $5.38B, EST. $4.94B"
- Markets: Record Q2 sales and trading revs, record Q2 equities sales and trading revs
- Consumer side: YTD consumer payment spend is up 4% Y/Y at $2.3tr
- Sectoral spending, they see increases in both volumes and transactions for travel & entertainment, food, retail and services (T&E, Services rising the fastest) however spending on gas declined by 6% in $ terms, on flat transaction numbers.
- Residential mortgage loans rose for the first time in 5 quarters, up to $118bln from $115bln in the prior quarter. Credit card and vehicle lending was broadly flat
US TSYS: Broadly Consolidating Yesterday’s CPI-Induced Breach Of TYA Support
Jul-16 10:50
- Treasuries trade modestly twist flatter on the day although broadly speaking consolidate yesterday’s sell-off on the June CPI report with its signs of increased tariff passthrough.
- Treasuries outperform Gilts across the curve owing to stronger than expected UK CPI, whilst they underperform EGBs at the front end but track in line further out the curve.
- Cash yields are 0.7bp higher (2s) to 1.8bp lower (30s).
- The 10Y yield, currently at 4.473%, saw an overnight high of 4.493%, having last cleared 4.50% on Jun 11.
- TYU5 trades at 110-11+ (+ 02+) on solid cumulative volumes of 375k, albeit keeping to narrowing ranges of 110-08+ to 110-13+.
- It consolidates yesterday’s push lower to that 110-08+, seen multiple times since then, in a move that breached an important support at 110-17 (61.8% of May 22 – Jul 1 bull leg). It has also traded through trendline support at 110-23+, strengthening a bearish theme and opening 110-03 (76.4% retrace of the same bull leg).
- Data: MBA mortgage applications (0700ET), PPI Jun (0830ET), NY Fed services Jul (0830ET), IP/Cap util Jun (0915ET)
- Fedspeak: Barkin repeats speech (0830ET, text + Q&A), Hammack on community development (0915ET, text only), Gov. Barr on financial regulation (1000ET, text + Q&A), Beige Book (1400ET), Bostic on fox business network (1530ET), NY Fed's Williams on economic outlook and policy (1830ET, text + Q&A).
- Bill issuance: US Tsy to sell $65bn 17-W bills (1130ET)
