US: Treasury Sec Talks On China Trade, Fed Situation & Russia Sanctions
Speaking on Fox Business, Treasury Secretary Scott Bessent says that "everything is on the table" when it comes to future trade talks with China. He downplays the next set of talks, saying the visit of Li Chenggang, the top aide to Beijing’s lead negotiator, Vice-Premier He Lifeng, to Washington, D.C., this week as "more of a technical visit". Says that he is likely to meet the vice-premier in late-Oct/early Nov for the next set of high-level talks, adding that each meeting is "moving the ball forward".
- Asked on when Trump will name the individual to replace Fed chair Jay Powell at the end of his term, Bessent says, "We're moving...there are 11 very strong candidates...Will be talking to them after Labor Day....We will present 3/4 candidates to the president." Says Trump has his own "sophisticated" views on monetary policy, which "drives some Fed officials crazy." Says Trump has "great reverance" for the Fed, but that the institution has "lost its way," claiming that since 2008 the central bank "has strayed from it's core mission." Asked by the host whether a name will be forthcoming in the autumn, Bessent replies "Sure."
- Regarding the claims made against Fed Gov. Lisa Cook, Bessent says there must be an investigation into the alleged mortgage fraud, that Cook so far has not personally denied the allegations, and that incidents such as this damage the central bank's credibility with the public.
- Bessent claims that "Europe was unwilling" to become involved in secondary tariffs on Russia (i.e. the 25% tariffs on Indian exports added to the reciprocal tariffs to punish India's purchase of Russian oil). Claims that Canada was willing to join in.
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USDJPY TECHS: Support At The 50-Day EMA Holds
- RES 4: 151.21 High Mar 28
- RES 3: 150.49 High Apr 2
- RES 2: 149.38 50.0% retracement of the Jan 10 - Apr 22 bear leg
- RES 1: 148.66/149.18 High Jul 21 / High Jul 16 and the bull trigger
- PRICE: 148.40 @ 12:31 BST Jul 28
- SUP 1: 146.76 20-day EMA
- SUP 2: 146.01/145.86 50-day EMA / Low Jul 24
- SUP 3: 145.16 61.8% retracement of the Jul 1 - 16 bull cycle
- SUP 4: 144.21 76.4% retracement of the Jul 1 - 16 bull cycle
A bull cycle in USDJPY remains in place. Today’s strong start to the week signals the end of the corrective pullback between Jul 16 - 24. Attention is on key resistance and the bull trigger at 149.18, the Jul 16 high. A break of this hurdle would confirm a resumption of the uptrend. Pivot support to monitor is 146.01, the 50-day EMA. A clear breach of it would instead signal scope for stronger reversal. First support is at 146.76, the 20-day EMA.
GLOBAL: Greer Doesn't Expect Big Breakthrough on China Trade Today
USTR Greer speaking on CNBC:
- "ON EU TRADE: WANT TO KEEP WORKING ON STEEL, DIGITAL SERVICES TAXES ALSO AREA TO KEEP WORKING ON
- ON CHINA TRADE: WANT TO MOVE FORWARD IN A POSITIVE WAY, DON'T EXPECT BIG BREAKTHROUGH TODAY" - Reuters
OUTLOOK: Price Signal Summary - Monitoring Support In Gilts
- In the FI space, Bund futures traded lower Friday, extending the reversal from the Jul 22 high. The move down resulted in a print below key support and a bear trigger, at 129.08, the Jul 14 low. The 129.00 handle represents a key area of support and a clear break of it would represent an important bearish development. It marks the base of a 3.5-month range. Initial key resistance to watch is 129.97, the 20-day EMA.
- Gilt futures have pulled back from the Jul 22 high. For now the contract remains above its recent lows. A rally early last week resulted in a break of the 20-day EMA. A resumption of gains would signal scope for a climb towards 92.42 next, a 50.0% retracement of the Jul 1 - 18 bear leg. On the downside, key support and the bear trigger has been defined at 91.08, the Jul 18 low.
