US TSYS: Tsys Reject Post-CPI Rally, Mildly Lower, Focus on Next Week's FOMC
Oct-24 19:27
- Treasuries look to finish mildly weaker Friday - well off knee-jerk highs after the Sep CPI inflation data came out lower than expected. Core rose a seasonally adjusted 0.23% M/M (median unrounded expectation of 0.32) and with the miss translating into the non-seasonally adjusted Y/Y rate at 3.02% (cons 3.1) after two months at 3.1%.
- White House's Rapid Response account on X.com suggests that the BLS may not release an October inflation report because it was unable to conduct the in-person surveys as normal during October, on account of the shutdown.
- Tsys extended lower after S&P flash PMI (link) noted strong business activity growth (second-fastest of the year) although prices charged rose at their softest rate since April. Tsys held modestly weaker levels after lower than expected UofM sentiment, current conditions and expectations, while 5-10Y inflation exp rises slightly.
- Tsy Dec'25 10Y contract currently at 113-14.5 (-1) vs. 113-09.5 low, 10Y yld 3.9969% -.0040; curves mildly steeper: 2s10s +0.667 at 51.270, 5s30s +1.634 at 98.433. Moving average studies are in a bull-mode position and this set-up highlights a dominant uptrend. Sights are on 114-10, the Apr 7 high (cont) and the next key resistance. Firm support lies at 113-06+, the 20-day EMA.
- The dollar index declined around 30 pips in the immediate aftermath, however, downside momentum quickly stalled. Overall, the DXY is unchanged on the session.
- Stocks gapped to new record highs following Friday morning's lower than expected CPI inflation data, sentiment buoyed as the report underscored expectations of two 25bp rate cuts by year end.
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US STOCKS: Late Equities Roundup: Paring Longs Ahead Thursday's Heavy Data
Sep-24 19:20
- Stocks held at/near Wednesday session lows in late trade, profit taking evident ahead of Thursday's heavy economic data and continued Fed speaker schedule. Currently, the DJIA trades down 163.42 points (-0.35%) at 46128.6, S&P E-Minis down 24.25 points (-0.36%) at 6690.75, Nasdaq down 78.3 points (-0.3%) at 22494.57.
- Materials, Technology and Communication Services sector shares underperformed in the second half. Materials weighed by Freeport-McMoRan -16.08% after down-revising their third-quarter projections, DuPont de Nemours -2.65%, Smurfit WestRock -1.39%.
- Tech stocks drew additional profit taking in the second half: Synopsys -4.71%, Jabil -3.97%, Oracle and Adobe both declined -2.86%, while Electronic Arts -3.30%, Take-Two Interactive Software -2.67% and TKO Group Holdings -2.62% weighed on the Communication Services sector.
- On the positive side, Energy and Consumer Discretionary sector shares continued to lead gainers, oil and gas stocks buoyed the former as crude prices climbed higher (WTI +1.43 at 64.84): EQT Corp +4.18%, Phillips 66 +3.45%, APA Corp +2.86% and Expand Energy Corp +2.79%.
- Discretionary sector shares supported by Tesla +3.66%, Lululemon Athletica +3.13%, eBay +2.59% and Ross Stores +2.43%.
EURGBP TECHS: Sights Are On The Bull Trigger
Sep-24 19:13
- RES 4: 0.8835 High May 3 2023
- RES 3: 0.8800 Round number resistance
- RES 2: 0.8769 High Jul 28 and the bull trigger
- RES 1: 0.8746 High Sep
- PRICE: 0.8726 @ 20:06 BST Sep 24
- SUP 1: 0.8653/8597 50-day EMA / Low Aug 14 and the bear trigger
- SUP 2: 0.8562 50.0% retracement May 29 - Jul 28 upleg
- SUP 3: 0.8540 Low Jun 30
- SUP 4: 0.8514 61.8% retracement May 29 - Jul 28 upleg
EURGBP is trading closer to its recent highs and a bullish theme remains intact. The latest recovery paves the way for an extension towards the bull trigger at 0.8769, the Jul 28 high. Clearance of this level would strengthen the bullish theme. Support to watch lies at 0.8597, the Aug 14 low. A breach of this level would instead cancel a bull theme and reinstate a recent bearish threat. First support is 0.8653, the 50-day EMA.
GBPUSD TECHS: Trendline Support Has Been Pierced
Sep-24 19:01
- RES 4: 1.3789 High Jul 1 and key resistance
- RES 3: 1.3753 High Jul 2
- RES 2: 1.3661/3726 High Sep 18 / 17
- RES 1: 1.3537 High Sep 23
- PRICE: 1.3449 @ 20:00 BST Sep 24
- SUP 1: 1.3426 76.4% retracement of the Sep 3 - 17 bull leg
- SUP 2: 1.3333 Low Sep 3 and a key support
- SUP 3: 1.3282 Low Aug 6
- SUP 4: 1.3254 Low Aug 4
GBPUSD traded lower Wednesday and this marked an extension of the corrective cycle that started Sep 17. The move down has resulted in a print below 1.3466, a trendline support drawn from the Aug 1 low. A clear break of this line would strengthen a bearish theme and expose 1.3333, the Sep 3 low and a key support. Initial resistance to watch is 1.3537, the Sep 23 high. Clearance of this hurdle would signal a reversal.
