GLOBAL: UK Navy Reports Incident in Gulf of Aden
May-01 11:28
"UKMTO SAYS IT RECEIVED A REPORT OF AN INCIDENT 92 NM SOUTHWEST OF YEMEN'S MUKALLA, SAYS MASTER OF B...
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
FOREX: AUDNZD Rallies Back Above 1.20, Natixis Recommend 4m Call
Apr-01 11:24
- Relative outperformance for the Australian dollar on Wednesday has helped AUDNZD (+0.32%) re-establish itself back above the 1.20 mark. Despite a pullback across late March, the cross remained comfortably above 50-day EMA support (now intersects at 1.1870), with bullish trend conditions still firmly intact and the central bank’s policy stance continuing to provide a supportive backdrop.
- The RBA is likely to calculate that a still-tight labour market should allow the economy to absorb some impact from weaker global growth or higher interest rates, MNI understands. Australia employment data for March is the next notable data release on the domestic calendar, not due until April 16.
- Natixis believes the cross presents a compelling long opportunity driven by a clear divergence in monetary policy, commodity price strength, and relative economic resilience. They highlight Australia's diversified commodity exposure to iron ore, coal, and LNG provides powerful tailwinds, while New Zealand faces significant headwinds from weak business confidence and pressures on its agricultural sector.
- They recommend buying a 4m call, with a 1.203 strike and a RKO at 1.25. The structure aims to neutralize the effects of broad USD moves and global risk aversion, focusing purely on the fundamental Antipodean divergence.
US DATA: Mortgage Applications Slip Again As Higher Rates Continue To Bite
Apr-01 11:14
- MBA composite mortgage applications saw a third consecutive weekly decline of 10-11% last week in seasonally adjusted terms, with -10.4%.
- Refis are leading this weakness in an environment of sizeable increases in mortgage rates in spillover from the US-Israel-Iran conflict, sliding another -17.3% after -14.6%, although new purchase applications also fell -2.6% after -5.4%.
- Indeed, composite applications are at their lowest since the week at the turn of the year although new purchase applications (a better gauge for upcoming housing market activity) are only back to levels seen in late Feb shortly before the first US-Israel strikes on Iran.
- The 30Y conforming rate increased 14bp to 6.57% for a 48bp increase since the 6.09% in late Feb at what was its lowest since Sep 2022.
- Market-based rates do at least offer some grounds for optimism with a latest 10Y Tsy yield 9bp below last week’s average and the 10Y swap rate 7bp below.
- Spreads continued to widen last week, with the spread to 10y Tsy yields increasing to 220bp (+2.7bp) having bottomed in the high 190s in mid-Jan to early Feb. Alternatively, the spread to 10Y swaps rates widen to 266bps (+2.7bp) having bottomed in the 230s in mid-Jan to early Feb.
OUTLOOK: Price Signal Summary - Gains In Gold Appear Corrective For Now
Apr-01 11:11
- On the commodity front, a corrective cycle in Gold is in play. Key near-term resistance is at $4801.1, the 50-day EMA. A clear break of this average is required to signal scope for a stronger recovery. This would open $4914.9, 61.8% retracement of the Mar 2 - 23 bear leg. For bears, a reversal would mark the end of the correction and signal scope for a move towards the bear trigger at $4099.2, the Mar 23 low.
- A bull wave in WTI futures remains intact and the sharp pullback on Mar 23 proved to be a correction. A fresh short-term cycle high yesterday reinforces the bull theme. A key support zone to monitor is the area between $90.76 - $79.50, the 20- and 50-day EMA values. Sights are on $113.41, the Mar 9 high and bull trigger.
