FED: US TSY 29Y-10M BOND AUCTION: HIGH YLD 5.618%; ALLOT 26.77%

• RES 4: 1.1797 High May 6 
• RES 3: 1.1742 High May 13
• RES 2: 1.1725 76.4% retracement of the Apr 17 - Jun 24 bear leg 
• RES 1: 1.1658/1711 High Aug 28 / High Aug 20 & 21 and bull trigger
• PRICE: 1.1627 @ 16:47 BST Sep 08
• SUP 1: 1.1566 Low Sep 02
• SUP 2: 1.1561 50-day EMA
• SUP 3: 1.1512 Low Aug 13
• SUP 4: 1.1455 Low Jul 31

EURUSD is trading in a tight range. A bull theme remains intact and recent weakness appears corrective. Key support at the 50-day EMA, at 1.1561, is intact. A clear break of this EMA is needed to undermine the bull theme and signal scope for a deeper retracement. A resumption of gains would refocus attention on key short-term resistance at 1.1711, the Aug 20 and 21 high. Clearance of this hurdle resumes the uptrend.       

• WI is steady ahead of the $58B 3Y note auction (91282CRL7) cut-off at 1300ET.
• 3Y WI is currently at 4.472%, 18.1bp cheap to last month's stop: 4.291% high yield vs. 4.295% WI.

Circling back to the NFIB small business survey for August from earlier today, firms’ price setting expectations held onto July’s decline in contrast to a net climb in crude oil futures. However, the latter was only modest when looking at averages across the whole month and could see a more material impact in September’s results, at least for now with WTI futures at $92 vs the $82 averaged through August. 

• Business optimism dipped to 98.7 (cons 99.3) in August from 99.8 in July although it still holds most of the recovery of initial US-Iran war losses (having seen a low of 95.3 in May).
• Actual price changes: unchanged with a net 31% of firms having increased prices compared to three months ago. It consolidates the pullback from the 38% in June at what had been a joint higher with Feb 2023.
• It continues to show much wider breadth of price increases than the 11-12% seen pre-pandemic, although doesn't give a sense of the magnitude of price changes.
• Planned price changes: unchanged with a net 28% of firms expecting to increase prices over the next three months. This has also pulled back from 34% in May in what was a joint highest since Nov 2023. It averaged 21-22% in 2017-19.
• The press release adds that: “Reports of inflation as the single most important problem picked up in August. Sixteen percent of business owners cited inflation as their single most important business problem, up 2 points from July and ranking the second top issue, tied with taxes. August’s reading remains elevated, with the historical average at 7%.”