LATAM: Summary – May 15
May-15 10:25
- Brazil March economic activity data are due on Wednesday, with analysts expecting growth to fall to -2.0% y/y, from +2.6%. Colombia will publish Q1 GDP data, with growth set to edge up to +0.8% y/y, while March economic activity will also be released. In Peru, March economic activity and April unemployment data will cross.
- Elsewhere, US CPI data take the focus, with markets wary of an out-of-consensus print following the volatile PPI release on Tuesday. Annual core inflation is expected to slow to a new post-pandemic low of 3.6% y/y, and the determinants of PCE will come under particular scrutiny for gauging any Fed policy response.
- Global News:
- CHINA - China is considering a proposal to have local governments across the country buy millions of unsold homes, people familiar with the matter said, in what would be one of its most ambitious attempts yet to salvage the beleaguered property market. The State Council is seeking feedback from several provinces and government entities on the preliminary plan, said the people, asking not to be identified discussing a private matter.
- EU - The ECB is very likely to start cutting interest rates at its next policy meeting in June, Bank of France Governor Francois Villeroy de Galhau said. Barring surprise shocks, the ECB remains committed to bringing inflation to its 2% goal by next year from 2.4% currently, he said in an interview on RTL radio on Wednesday.
- COMMODITIES - Copper futures in New York rallied to a record high after a short squeeze that’s prompted a scramble to divert metal in other regions to US shores. The sudden surge, which has seen Comex futures jump by more than 7% this week, has left metal for July delivery to the New York exchange trading at a record premium over later months, and at unprecedentedly high levels compared with copper on other global commodities exchanges.
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Historical bullets
SONIA: Put fly buyer
Apr-15 10:24
SFIK4 94.90/94.85/94.80p fly, bought for 1 in 1.5k.
US 10YR FUTURE TECHS: (M4) Trend Needle Points South
Apr-15 10:22
- RES 4: 111-10+ High Mar 13
- RES 3: 110-12+/31+ 50-day EMA / High Mar 27 and key resistance
- RES 2: 110-06 High Apr 4
- RES 1: 109-02/26+ Low Apr 8 / High Apr 10
- PRICE: 108-08+@ 11:09 BST Apr 15
- SUP 1: 107-27+ Low Apr 11
- SUP 2: 107-26+ 2.382 proj of Dec 27 - Jan 19 - Feb 1 price swing
- SUP 3: 107-07+ 76.4% of the Oct - Dec ‘23 bull leg (cont)
- SUP 4: 106-27 2.764 proj of Dec 27 - Jan 19 - Feb 1 price swing
The sharp sell-off in Treasuries last week reinforces the current bearish cycle. The move lower confirmed a resumption of this year’s downtrend. Support at the 109-00 handle and 108-25, the 2.00 projection of Dec 27 - Jan 19 - Feb 1 price swing, has been breached. Sights are on 107-26+ next, the 2.382 projection. Initial resistance has been defined at 109-26+, the Apr 10 high. Key short-term resistance is at 110-06, the Apr 4 high.
CFTC: Markets Build JPY Net Short to Multi-Decade High, Defying Threat of Intervention
Apr-15 10:16
- Currency markets saw sizeable shifts to the short side in the week ending April 9th, with GBP, NZD and CHF positions deteriorating most markedly. The NZD short position built most sharply, doubling as a % of open interest to 24.1%.
- Defying the Japanese authorities’ warnings of intervention against outsized moves in the currency, CFTC data shows the JPY net short position growing to 50% of open interest – leaving markets outright short by 162,151 contracts, the largest net short since the onset of the Global Financial Crisis in 2007.
- CHF short position also grew notably, by 9,394 contracts, or 9.3% of open interest, resulting in further gains for USD/CHF above the 0.91 handle last week.
- Meanwhile, EUR, AUD and MXN positions crept higher – but at a marginal rate, keeping overall net positions within recent ranges.
- Full update here:
