EM LATAM CREDIT: SQM: Codelco Lithium Partnership Update - Neutral

• The bull flattening of the US treasury curve has driven price action in FX today, anticipating the nearing deadlines for reciprocal tariff deals and expected EU retaliation against US trade measures. The lower yields have prompted some renewed pessimism for the dollar, with the USD index around 0.6% lower on the session, erasing a solid portion of the cautious DXY recovery across July.
• Greenback weakness has been most notable against the JPY, currently down 1.1% as we approach the NY crossover. Price action follows the upper house election in Japan where the ruling coalition lost their majority. Despite a political vacuum for legislation being created, PM Ishiba deciding to remain in his position and short-term positioning dynamics have exacerbated the relief rally for the yen.
• USDJPY has narrowed the gap to initial support at 146.92 (Jul 16 low), while key short-term support is seen at 145.78, the 50-day EMA. Should the pair reverse, the gap between today’s highs and last Friday’s close will be an obvious S-T focus between 148.66 and 148.83.
• Euro strength was also notable as EURUSD edged back above 1.17, keeping bullish conditions for the pair firmly intact. In similar vein, GBPUSD briefly rose back above 1.35 in the face of the current bearish technical bearish threat. Downside momentum on the break of a key trendline last week has failed to build, potentially squeezing some freshly initiated shorts.
• Lower-than-expected CPI data in New Zealand had a very brief downward impact on NZDUSD and although spot has reversed higher with the broader greenback trend, the Kiwi does underperform its g10 peers.
• RBA minutes highlight a light calendar on Tuesday, and with the Fed inside their pre-decision media blackout period, central bank speak is seen quieter also. Market interest picks up toward the tail end of the week, however, with prelim PMI data for July due Thursday as well as the ECB rate decision.

US Secretary of State Marco Rubio is shortly due to meet with Philippine President Ferdinand R. Marcos, Jr. at the Department of State. The two will deliver short remarks to the press ahead of the meeting. LIVESTREAM 

• President Marcos met earlier today with Defense Secretary Pete Hegseth at the Pentagon. Later this week, he will become the Southeast Asian leader to meet with Trump during his second term.
• Comes after Trump raised the August 1 proposed tariff rate on Manila from 17% to 20% in his recent round of tariff letters, threatening to complicate Washington’s relationship with its closest ally in the region.
• Reuters notes: "Trump has already struck trade deals with two of Manila's regional partners, Vietnam and Indonesia, driving tough bargains in trade talks even with close allies that Washington needs to keep onside in its strategic rivalry with China."
• Marcos said in a speech before leaving Manila. "I expect our discussions to focus on security and defense, of course, but also on trade. We will see how much progress we can make when it comes to the negotiations with the United States concerning the changes that we would like to institute to alleviate the effects of a very severe tariff schedule on the Philippines."

• RES 4: 1.1923 2.000 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 3: 1.1901 2.0% 10-dma envelope
• RES 2: 1.1851 High Sep 10 2021 
• RES 1: 1.1750/1829 High Jul 10 / 01 and the bull trigger 
• PRICE: 1.1705 @ 16:59 BST Jul 21
• SUP 1: 1.1557 Low Jul 17
• SUP 2: 1.1518 50-day EMA
• SUP 3: 1.1446 Low Jun 19
• SUP 4: 1.1405 Low Jun 11  

EURUSD rallied well into the Monday close, but stopped short of any material test of resistance. This confirms the move down since Jul 1 as corrective. The 20-day EMA has recently been cleared and scope is seen for a test of the 50-day EMA, at 1.1518. A clear break of the average is required to signal a stronger reversal. For now, trend indicators continue to highlight a dominant uptrend. A resumption of gains would open 1.1829, the Jul 1 high and bull trigger.