STIR: US Rates At Hawkish End of Week’s Narrow Range
Jul-24 10:06
- Fed Funds implied rates sit towards the hawkish end of the week’s narrow range, holding yesterday’s modest lift on reports that a US-EU trade deal was getting closer despite White House adviser Navarro saying to take the reports with a “grain of salt”.
- Cumulative cuts from 4.33% effective: 0.5bp Jul 30, 16.5bp Sep, 28bp Oct, 44.5bp Dec, 54.5bp Jan and 68.5bp Mar.
- The SOFR implied terminal yield of 3.185% (SFRZ6, +1bp) also remains within recent ranges.
- Today sees data headlined by weekly jobless claims covering a payrolls reference period for continuing claims before flash PMIs for July. The ECB decision should also be watched in case there are any surprises in the balance of risks.
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CANADA: USDCAD Primary Downtrend Intact, 50-Day EMA Resistance Holds [1/2]
Jun-24 10:06
- The sharp moves/reversals for both oil markets and the dollar on Monday have provided offsetting forces for the USDCAD exchange rate, keeping the pair in a relatively confined 88 pip range this week. The spike to 1.3798 appears technically corrective, and the primary downtrend is bolstered by the 50-day EMA capping the topside for now. The pair has not been above this average since early April.
- Continued dollar weakness would place attention back on key support and the bear trigger, which has been defined at 1.3540, the Jun 16 low. Clearance of this price point would resume the downtrend.
- At 1330BST (0830ET) we get the first of two monthly CPI readings ahead of the next BOC decision on July 30. Consensus for the Y/Y headline reading is 1.7%, with a slight upward skew, while the average of the BOC's preferred trim and median core measures is seen coming in at 3.0% Y/Y (3.15% unrounded in April), the highest in over a year.
- Another upside surprise in core measures could see a retracement of recent cut repricing (last 10bp, vs 6bp last week), with analysts remaining split on July easing expectations. This would likely reinforce the underlying bearish theme for USDCAD.
EQUITIES: Estoxx Put Fly
Jun-24 10:03
SX5E (19th Sep) 5600/4800/4000p fly, sold at 236 in 5k.
MNI: UK JUN CBI INDUSTRIAL TRENDS TOTAL ORDERS -33
Jun-24 10:00
- MNI: UK JUN CBI INDUSTRIAL TRENDS TOTAL ORDERS -33
- UK CBI JUN PRICE INTENTIONS 19
