US TSYS: Tsy Yields Retreat After FOMC Leave Rates Steady
Nov-01 20:24
- Tsy futures near highs after the bell, Dec'23 10Y at 107-00.5 vs. 107-04 high(+30.5), 10Y yield -.1693 to 4.7614% after the FOMC left rates unchanged for the second consecutive time, stocks higher as well as market take away is the Fed is farther along the hiking path.
- While discussing whether every meeting is "live", Chairman Powell said "we are going meeting by meeting, asking ourselves whether we achieved a stance of policy sufficiently restrictive to bring inflation down 2% over time" - "we have come very far with this rate hiking cycle, very far."
- Projected rate hikes into early 2024 continue to step down: December cumulative of 4.8bp at 5.373%, January 2024 cumulative 7.3bp at 5.398%, while March 2024 starts pricing in a cut (20.3%) with cumulative at 2.6bp at 5.350%. Fed terminal has slipped to 5.385% in Feb'24.
- Projected rate hikes into early 2024 continue to step down: December cumulative of 4.8bp at 5.373%, January 2024 cumulative 7.3bp at 5.398%, while March 2024 starts pricing in a cut (20.3%) with cumulative at 2.6bp at 5.350%. Fed terminal has slipped to 5.385% in Feb'24.
- Busy first half saw Treasury futures turn higher after lower than expected ADP private jobs data (113k vs. 150k est, 89k prior). Futures bounced again after nominal Tsy refunding hikes ($112B vs. $114B estimate).
- Tsy futures surged higher yet again after weaker than expected ISM data: Mfg (46.7 vs. 49.0 est), Employ (46.8 vs. 50.6 est), New Orders (45.5 vs. 49.8 est) and Prices Paid (45.1 vs 45.0 est).
- Meanwhile, Construction Spending MoM (0.4% vs. 0.4% est, prior up-revised to 1.0 from 0.5%) while JOLTS Job Openings firmed (9.553M vs. 9.400M est, prior down-revised to 9.497M from 9.610M).
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USDCAD TECHS: Corrective Cycle Remains In Play
Oct-02 20:00
- RES 4: 1.3805 High Mar 24
- RES 3: 1.3704 Trendline resistance drawn from the Oct 13 2022 high
- RES 2: 1.3695 High Sep 7 and key resistance
- RES 1: 1.3676 High Oct 2
- PRICE: 1.3659 @ 16:36 BST Oct 2
- SUP 1: 1.3417/3381 Low Sep 29 / 19 and a bear trigger
- SUP 2: 1.3323 61.8% retracement of the Jul 14 - Sep 7 bull leg
- SUP 3: 1.3266 Low Aug 2
- SUP 4: 1.3235 76.4% retracement of the Jul 14 - Sep 7 bull leg
USDCAD traded higher again Monday. Despite the latest recovery, the trend outlook is bearish and gains are considered corrective. The recent breach of 1.3490, the Sep 1 low, and the move below the 50-day EMA, reinforced a bearish theme. A resumption of weakness would open 1.3323 next, a Fibonacci retracement. Next resistance to watch is the bull trigger at 1.3695, the Sep 7 high. A break above here opens levels not seen since March.
AUDUSD TECHS: Key Resistance Stays Intact
Oct-02 19:30
- RES 4: 0.6630 High Aug 2
- RES 3: 0.6616 High Aug 16
- RES 2: 0.6522 High Aug 30 and Sep 1, and the key resistance
- RES 1: 0.6501 High Sep 29
- PRICE: 0.6385 @ 16:35 BST Oct 2
- SUP 1: 0.6331 Low Sep 27 and the bear trigger
- SUP 2: 0.6287 2.00 proj of the Jun 16 - Jun 29 - Jul 13 price swing
- SUP 3: 0.6272 Low Nov 3 2022 and a key support
- SUP 4: 0.6215 2.236 proj of the Jun 16 - Jun 29 - Jul 13 price swing
AUDUSD remains inside a wide range. The pair has pulled back from Friday’s high and traded lower Monday. A continuation would expose 0.6331, the Sep 27 low and bear trigger. A breach of this level would confirm a resumption of the downtrend and open 0.6287 next, a Fibonacci projection. On the upside, key short-term trend resistance to watch is 0.6522, the Aug 30 and Sep 1 high. Clearance of this level would instead be bullish.
US TSYS: Tsys Back Near Midday Lows, Mixed Data, Shutdown Averted
Oct-02 19:22
- Tsy futures remain weaker, near midday lows after attempting to rebound in the second half. Dec'23 10Y futures are at 107-11 (-23) vs. 107-07 low, 10YY at 4.6785% (+.1074) vs. 4.7014% high. Curves remain steeper: 3M10Y +9.262 at -79.260, 2Y10Y +4.686 at -42.976.
- No delay in economic data this week after Congress passed a stopgap funding bill Saturday evening that will keep Federal agencies open through November 17, 2023.
- Tsys extended lows after S&P Global US Manufacturing PMI comes out higher than expected (49.8 vs. 48.9 est). Fast two way trade was noted after ISM data.
- Treasury futures extend early session lows (TYZ3 107-12.5) then rebound mixed ISM manufacturing came out higher than expected (49.0 vs. 47.8 est). ISM Prices Paid lower than expected (43.8 vs. 48.8 est), Employment higher: (51.2 vs. 48.5 prior) and New Orders (49.2 vs. 46.8 prior). in contrast, Construction Spending was in line with expectations at 0.5%.
- Cross asset summary: Greenback remains strong (DXY +.731 at 106.905), Gold remains weak (-18.77 at 1829.86), crude weaker too (WTI -2.16 at 88.64). Stocks mixed, Nasdaq outperforming: up 21.43 points (0.3%) at 13240.75, DJIA down 201.42 points (-0.6%) at 33310.09, S&P E-Mini Future down 24.75 points (-0.57%) at 4302.
- Limited data release Tuesday, focus on ADP early Wednesday ahead Fri's September Jobs data.
