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Dec-18 11:50
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OUTLOOK: Price Signal Summary - USDJPY Bull Cycle Extends
Nov-18 11:45
- In FX, resistance to watch in EURUSD is 1.1669, the Oct 28 high. Clearance of this hurdle is required to strengthen a short-term bull theme and highlight a stronger reversal. Note that moving average studies are in a bear-mode position. This highlights a dominant downtrend and continues to suggest that gains since Nov 5 are corrective. A reversal lower would refocus attention on key support at 1.1469, the Nov 5 low.
- A key short-term resistance in GBPUSD at 1.3203, the 20-day EMA, remains intact. It has been pierced, a clear break of it would signal scope for a stronger corrective cycle and expose the 50-day EMA, at 1.3303. Moving average studies remain in a bear-mode condition and continue to highlight a dominant downtrend. A reversal would signal the end of the correction and a resumption of the bear leg. The bear trigger is 1.3010, the Nov 4 and 5 low.
- USDJPY continues to appreciate, confirming a resumption of the uptrend and an extension of recent gains. The 155.00 handle has been cleared and sights are on 155.53 next, a 2.00 projection of the Sep 17 - 26 - Oct 1 price swing. Note that moving average studies are in a bull-mode position, this continues to highlight a dominant uptrend. Initial firm support to watch is 153.49, the 20-day EMA. A clear breach of the average would signal scope for a corrective pullback.
STIR: Fed Rates Soften But Keep Dec A Close Call, Labor Data In Spotlight
Nov-18 11:44
- Fed Funds implied rates have softened 0.5-3bp overnight for meetings out to mid-2026, although a December pause is still seen a marginally more likely than another cut.
- There has been some reference to a Bloomberg piece from late yesterday on higher WARN notices in a Cleveland Fed tally for October, but we note that this somewhat chimes with the Challenger report from two weeks ago which showed its highest layoff announcements for an October since 2003.
- Cumulative cuts from 3.87% effective: 11bp Dec, 22bp Jan, 32.5bp Mar, 39.5bp Apr, 55.5bp Jun.
- SOFR futures are up 3.5 ticks firmer in 2026 and 2027 contracts, with the terminal yield of 3.075% (H7) at the lower end of the 3.065-3.16% range for closes seen in recent weeks.
- The weekly ADP report will be watched closely.
- Today’s Fedspeak highlights likely come from Richmond Fed’s Barkin on the economic outlook at 1100ET (text + Q&A). However, the fact he doesn’t hold a voting role in 2025 or 2026 should limit the market reaction considering heightened attention on near-term rate cut prospects.
- He hasn’t materially touched on the outlook since September. We suspect he was one of the six dots back at the September SEP looking for no further rate cuts in the year (i.e. would have preferred not to cut last month) but we have lower conviction there than for some others.
PIPELINE: Corporate Bond Roundup: Strong Start to Week
Nov-18 11:38
- Date $MM Issuer (Priced *, Launch #)
- 11/18 $600M Eurofima Jan 2029 SOFR+36
- 11/18 $Benchmark Sharjah 10.5Y Sukuk +145a
- $25.65B Priced Monday:
- 11/17 $15B *Amazon $2.5B 3Y +30, $2.5B 5Y +40, $1.5B +7Y +47, $3.5B 10Y +55, $3B 30Y +75, $2B 40Y +85
- 11/17 $6B *Morgan Stanley $2.35B 3NC2 +80, $650M 3NC2 SOFR+78, $3B 6NC5 +75
- 11/17 $1.5B *Enbridge $500M 3Y +63, $500M +5Y +80, $500M 10Y +110
- 11/17 $900M *Consolidated Edison 30Y +103
- 11/17 $850M *Molina Healthcr 5.25NC2 6.5%
- 11/17 $800M *Smurfit Westrock Fin 10Y +105
- 11/17 $600M *AptarGroup +5Y +105
- Investor calls:
- 11/17 $Benchmark: Western Alliance, Global Atlantic, Baxter Int, Cenovus, Spire, Vale
