FOREX: USD Outperforms, AUDNZD Surges to Fresh Cycle High Above 1.13
Sep-24 10:26
- Over the course of the European morning, the US Dollar has been trading with a supportive tone. Despite remaining within the post-Fed ranges, the likes of EUR and GBP have extended session declines to around 0.5% as we approach the NY crossover. For EURUSD, the solid amount of option expiries between 1.1750/1.18 appears to have capped the overnight price action, with the pair slowly edging back below 1.1760 at typing.
- GBPUSD has traded through the 50-day EMA and this leaves support at 1.3458 exposed, a trendline drawn from the Aug 1 low. Clearance of this line would strengthen a bearish threat.
- Firmer-than-expected monthly CPI data in Australia is prompting some Aussie outperformance, with AUDUSD currently up 0.15% and bucking the stronger dollar theme. Market participants have been more focussed on AUDNZD, which has extended its impressive rally on Wednesday to trade to a fresh cycle high of 1.1317. Resistance remains scant on the chart until 1.1491, the 2022 high. It is also worth noting that the NZ government has appointed Riksbank First Deputy Governor Anna Breman to be the new RBNZ governor.
- The low yielders have been under pressure this morning, with USDJPY notably rising above the post Fed highs of 148.38. Uncertainty regarding Japanese politics and the upcoming LDP leadership election may be playing its part here, while moving average studies continue to highlight a dominant uptrend. A resumption of gains would open 149.14, the Sep 3 high. Furthermore, the impressive grind higher for the likes of EURJPY and CHFJPY may be bolstering the bearish yen theme.
- US new home sales is the main data point later today, before Thursday’s SNB decision and US jobless claims data.
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LOOK AHEAD: Monday Data Calendar: Regional Fed Data, Home Sales, Fed Speakers
Aug-25 10:22
- US Data/Speaker Calendar (prior, estimate)
- 08/25 0830 Chicago Fed Nat Activity Index (-0.10, -0.11)
- 08/25 1000 New Home Sales (627K, 630K), MoM (0.6%, 0.5%)
- 08/25 1030 Dallas Fed Mfg Activity (0.9, -1.7)
- 08/25 1130 US Tsy $82B 13W & $73B 26W bill auctions
- 08/25 1515 Dallas Fed Logan Bank of Mexico conf (text, Q&A)
- 08/25 1915 NY Fed Williams keynote remarks Bank of Mexico (text, Q&A)
- 08/25 Building Permits (1.354M, --), MoM (-2.8%, --)
- Source: Bloomberg Finance L.P. / MNI
US TSYS: Bear Steeper As Cash Trading Resumes
Aug-25 10:12
- Treasuries trade bear steeper with cash trading back underway after UK closures for the bank holiday.
- Friday’s Powell-enhanced steepening has been further extended, with the front end still broadly consolidating the dovish shift on Powell (albeit quite comfortably off highs) whilst 30s extend losses.
- Cash yields are 1-3.7bp higher, led by 20s and 30s.
- Monitoring monetary policy implications from Powell, 2Y yields are currently at 3.707% vs a post-Powell low of 3.673% and ~3.78% pre-Powell.
- 5s30s at 114.6bps easily sets fresh ytd highs having peaked at 112.9bp on Friday.
- TYU5 trades at 112-01+ (-3) on cumulative volumes already at 375k but with more than half of that seemingly from quarterly roll activity.
- Friday’s post-Powell high of 112-08 didn’t test resistance at a bull trigger of 112-15+ (Aug 5 high). Support is seen at 111-12 (50-day EMA).
- Today’s data is focused on regional Fed surveys and housing whilst President Trump comments are watched more broadly, including a meeting with The President Of Korea at the White House from midday ET. Fedspeak from Logan and Williams comes much later in the session.
- Data: Chicago Fed nat activity Jul (0830ET), New home sales Jul (1000ET), Dallas Fed mfg Aug (1030ET), Building permits revisions Jul F
- Fedspeak: Logan speaks at Banxico panel (1515ET, text + Q&A), NY Fed’s Williams gives keynote remarks at Banxico conference (1915ET, text + Q&A)
- Bill issuance: US Tsy to sell $82bn 13-w and $73bn 26-w (1130ET)
- Politics: Trump signs executive orders (1000ET – Axios suggests on ending cashless bail), Trump in bilateral meeting with The President of Korea (1215ET)
OUTLOOK: Price Signal Summary - EUROSTOXX50 Futures Bull Cycle Still In Play
Aug-25 10:11
- In the equity space, the dominant uptrend in S&P E-Minis remains intact and Friday’s rally reinforces current conditions. Attention is on 6508.75, the Aug 15 high and the bull trigger. Clearance of this level would confirm a resumption of the uptrend and open 6523.63, a 1.764 projection of the May 23 - Jun 11 - 23 price swing. Support to watch lies at 6298.61, the 50-day EMA.
- The trend set-up in EUROSTOXX 50 futures is bullish and the contract traded to a fresh short-term cycle high last week. The recent print above the May and July highs strengthens a bull theme and opens 5575.00, the Mar 3 high (cont) and key resistance. Support to watch lies at 5370.47, the 50-day EMA.
