US: State Department Press Conference Underway Shortly
US State Department Spokesperson Ned Price is shortly due to deliver his regular press conference from the Department of State.
- Livestream: https://www.state.gov/todays-briefing-schedule/
- Questions are likely to focus on the fallout from OPEC+'s decision to slash oil production and the subsequent backlash from Democrat lawmakers.
- The other focus will be the NATO defence ministerial in Brussel's, Belgium where countries aligned with Ukraine are this week coordinating a response to the latest escalation from Russia.
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CANADA: Non-Mortgage Debt Servicing Helps Mitigate Mortgage Financing Concerns
- Household debt increased 2pts to 182% of disposable income in Q2 as liabilities (+2.1%) outpaced disposable incomes (+1.0%), but remained below the 4Q21 high of 185%.
- It came despite 2x50bp hikes from the BoC in the quarter but pre-dates a further 175bps of hikes in Q3 which should help limit new debt issuance ahead.
- Those hikes will also increase the debt service ratio with a lag though, with mortgage servicing already close to cycle highs at 7.0% before shorter-term fixes taken in post-pandemic moves have started to materially re-finance.
- One significant factor offsetting this financing concern however is non-mortgage servicing at 6.6%, which prior to the pandemic is at levels last seen in 2002 and at the margin limits a restriction on the BoC’s hiking cycle.
EURGBP TECHS: Key Resistance Remains Exposed
- RES 4: 0.8840 High Feb 2
- RES 3: 0.8811 1.236 proj of the Apr 14 - Jun 15 - Aug 2 price swing
- RES 2: 0.8721 High Jun 15 and a medium-term bull trigger
- RES 1: 0.8712 High Sep 8
- PRICE: 0.8652 @ 15:40 BST Sep 12
- SUP 1: 0.8651 Low Sep 12
- SUP 2: 0.8567 Low Sep 6 and a key short-term support
- SUP 3: 0.8520 50-day EMA
- SUP 4: 0.8471 Low Aug 29
EURGBP is trading closer to its recent high and the outlook remains bullish. Price has topped 0.8679, the Jul 1 high. The breach strengthens bullish conditions and exposes the key resistance at 0.8721, the Jun 15 high and an important bull trigger. Clearance of 0.8721 would confirm a resumption of the bull cycle that started early March. On the downside, initial firm support is seen at 0.8567, the Sep 6 low.
US: Corporate Credit Update: IG5 Mid-August Levels
Investment-grade corporate credit risk at the lowest levels since mid-August Monday, positive reaction to SPX extending gains over 50-day EMA. Currently SPX eminis trade +41.75 points (1.02%) at 4128; DJIA +234.78 points (0.73%) at 32391.63; Nasdaq +136.9 points (1.1%) at 12249.82.
- Investment grade risk measured by Markit's CDXIG5 index -1.696 to 79.284 (vs. 76.906 on Aug 18); CDXHY5 high yield index at 101.467 (+0.346).
- Outperforming credit sectors (tighter or least wide): Communications -1.8, Materials and subordinated Financials -1.5 followed by Energy -1.2.
- Lagging sectors (wider or least narrow): Sr Financials and Consumer Discretionary -0.7 followed by Utilities -0.8 at Industrials -0.9.
