BONDS: US and UK roll update

Aug-29 06:44
  • Ultra: 87%.
  • TBond: 87%.
  • Ultra 10: 80%.
  • TYA: 86%.
  • FVA: 86%.
  • TUA: 86%.
  • Gilt: 82%

Historical bullets

USDCAD TECHS: Resistance At The 50-Day EMA Remains Intact

Jul-28 20:00
  • RES 4: 1.3427 High Jun 7
  • RES 3: 1.3387 High Jul 7 and a key resistance
  • RES 2: 1.3288 50-day EMA
  • RES 1: 1.3249 High Jul 28
  • PRICE: 1.3225 @ 16:42 BST Jul 28
  • SUP 1: 1.3093 Low Jul 14 and the bear trigger
  • SUP 2: 1.3084 1.618 proj of the Apr 28 - May 8 - May 26 price swing
  • SUP 3: 1.3032 1.764 proj of the Apr 28 - May 8 - May 26 price swing
  • SUP 4: 1.2992 50.0% retracement of the 2021 - 2022 bull leg

USDCAD remains in consolidation mode and is trading above key support at 1.3093, the Jul 14 low. Moving average studies continue to highlight a dominant downtrend. A break of 1.3093 would confirm a resumption of the medium-term bear cycle. This would open 1.3084 and 1.3032, Fibonacci projection points. On the upside, clearance of the 50-day EMA, at 1.3288, is required to highlight a possible short-term reversal.

AUDUSD TECHS: Bearish Price Action

Jul-28 19:30
  • RES 4: 0.6847 High Jul 20
  • RES 3: 0.6821 High Jul 27
  • RES 2: 0.6746 20-day EMA
  • RES 1: 0.6714 Intraday high
  • PRICE: 0.6664 @ 16:41 BST Jul 28
  • SUP 1: 0.6619 Low Jul 7
  • SUP 2: 0.6596 Low Jun 29 and key support
  • SUP 3: 0.6562 76.4% retracement of the May 31 - Jun 16 rally
  • SUP 4: 0.6485 Low Jun 1

AUDUSD traded sharply lower Friday, extending the reversal from Thursday’s 0.6821 high. The move down reinforces a bearish theme and note that the pair is trading below both the 20- and 50-day EMAs. This signals scope for weakness towards the next key support at 0.6596, the Jun 29 low. On the upside, key short-term resistance has been defined at 0.6821, where a break is required to reinstate a bullish theme.

US TSYS: Late Roundup: Tsys Hold Midrange, Focus on July Employ Next Friday

Jul-28 19:25
  • Treasury futures remain in positive territory, off early session highs following a knee-jerk bid on lower than est Employment Cost Index gains 1.0% vs. 1.1% est, Core PCE 4.1% vs. 4.1% est.
  • Rates quickly reversed the gap move as markets deemed it an overreaction to near in-line data. Services saw a mild acceleration from 0.25% to 0.275% M/M but importantly the Fed’s preferred indicator of core non-housing services eased a tenth to 0.22% M/M. Softer ECI data an afterthought while benign price pressure evinced from UofM survey helped buoy rates back to middle of the range.
  • Tsy curves off early highs, currently mixed w/ 3M10Y -2.594 at -146.816, 2s10s +.600 at -92.849 (vs. -86.190 high) as short end rates lagged the rally in intermediates. As such, rate hike projections through year end remained subdued (18-36% chance of 25bp hike before year end). Markets much more eager to price in rate CUTS in 2024 (first 25bp cut in May '24, second in July'24.
  • Focus turns to next week's ISMs on Tue (Mfg 46.98 est, prices paid 44.0 est), ADP on Wednesday (+188k est vs. 497k prior), and July employment data next Friday, current estimate of +200k job gains vs. +209k in June.
  • Equity earnings resume Monday, premarket: Immunogen; after the close: Diamondback Energy, Tenet Health, Monolithic Power, Welltower, Rambus, and Western Digital.