US TSYS: Late SOFR/Treasury Option Roundup

A new survey from Gallup has found that Republicans are leading Democrats on a range of metrics that have historically been “highly predictive” of presidential election outcomes.

• Gallup writes: “Chief among these are a Republican advantage in U.S. adults’ party identification and leanings, the belief that the GOP rather than the Democratic Party is better able to handle the most important problem facing the country, Americans’ dissatisfaction with the state of the nation, and negative evaluations of the economy with a Democratic administration in office.”
• Gallup notes: “By 46% to 41%, Americans say the Republican Party is better able than the Democratic Party to address what they think is the most important problem facing the country. The top issues Americans currently name as the most important are ones that tend to favor the GOP, including the economy (24%), immigration (22%), the government (17%) and inflation (15%). This measure has been highly predictive of election outcomes in Gallup trends dating back to 1948. The party rated as better at handling the most important problem has won all but three presidential elections since that year. The question was not asked in 2000, and the two parties tied in 1980, when inflation was the top issue."

Figure 1: Key Measures of the 2024 Presidential Election Environment

Source: Gallup

• RES 3: 149.55 - High Mar 22 (cont)
• RES 2: 147.74 - High Jan 15 and bull trigger (cont)  
• RES 1: 146.53 - High Aug 6 
• PRICE: 145.13 @ 15:22 BST Sep 24
• SUP 1: 143.57 - Jul 17 high
• SUP 2: 142.23 - Low Jul 02
• SUP 3: 140.21 - 1.236 proj of Mar 22 - Nov 1 ‘23 - Jan 15 price swing    

A bullish outlook for JGB futures remains intact. Strong impulsive gains in early August reinforce this theme and the pullback between Aug 6 - Sep 3, appears to have been a correction. Moving average studies on the continuation chart are in a bull-mode position, highlighting a clear uptrend. A continuation higher would open 146.53, the Aug 6 high(cont) and a bull trigger. A reversal lower would instead expose 143.57, the Jul 17 high.

• RES 4: 147.21 High Sep 3  
• RES 3: 146.86 50-day EMA 
• RES 2: 145.57 High Sep 4    
• RES 1: 144.68 High Sep 24      
• PRICE: 143.49 @ 15:28 BST Sep 24
• SUP 1: 141.74/139.58 Low Sep 20 / 16 and the bear trigger     
• SUP 2: 139.00 1.382 proj of the Aug 15 - 26 - Sep 3 price swing
• SUP 3: 138.30 1.50 proj of the Aug 15 - 26 - Sep 3 price swing
• SUP 4: 138.07 Low Jul 28 2023  

USDJPY traded higher last week and remains above its most recent low. However, short-term gains appear corrective. Trend signals remain bearish and the pair traded to a fresh cycle low last week. The recent breach of key support at 141.70, the Aug 5 low, confirms a resumption of the downtrend. Sights are on 139.00 next, a Fibonacci projection. The 20-day EMA has been breached, the next key resistance is 146.86, the 50-day EMA.