CHILE: USDCLP Bull Cycle Intact, Election Candidate Kast Gaining Support
Sep-03 11:27
- Amid the broad risk-off yesterday, the Chilean peso slid 0.48% against the dollar, with USDCLP closing at 973, the highest close for the pair since August 6. As noted, a bull cycle in USDCLP remains in play, with scope seen for an extension towards 987.67, the 76.4% retracement of the sell-off between Apr 9 - Jul 2. Key support to watch is at 959.85, the 50-day EMA. A clear break of this average is required to signal a stronger reversal. This would expose 946.49, the Jul 23 low.
- On the data front, the calendar is clear today, with focus ahead on the BCCh traders survey tomorrow and nominal wage figures for July on Friday. These will be followed by key August CPI inflation data on Monday, which come just ahead of Tuesday’s BCCh monetary policy meeting.
- After firmer than expected CPI stats last month and recent upbeat non-mining activity data, most analysts expect the central bank to stay on hold next week, although risks are still skewed towards the possibility of a second consecutive 25bp rate cut.
- In other news, Bloomberg reports that hard-right presidential candidate José Antonio Kast is gaining support from several key figures and past officials who are departing a rival coalition to join his campaign. The shift is said to be undermining centre-right candidate Evelyn Matthei. A recent poll from Cadem revealed that 39% of respondents expect Kast to be the next president, followed by 29% for left-wing candidate Jeanette Jara, and 10% for Matthei.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
OPTIONS: Larger FX Option Pipeline
Aug-04 11:14
- EUR/USD: Aug05 $1.1425(E1.6bln), $1.1500(E1.4bln), $1.1550(E1.7bln), $1.1585-00(E2.5bln); Aug06 $1.1500-10(E1.6bln)
- USD/JPY: Aug06 Y152.00($1.0bln); Aug07 Y147.65($1.0bln), Y148.00-15($1.7bln), Y148.50($1.1bln)
- EUR/GBP: Aug05 Gbp0.8650-70(E1.3bln)
- AUD/USD: Aug05 $0.6465-80(A$1.1bln); Aug07 $0.6600(A$2.0bln)
BONDS: TD Maintain Bias for Lower Bund & Gilt Yields At Year-End
Aug-04 11:02
TD Securities note that bond markets “will continue to balance the impact of fiscal and tariffs”. They see “more scope for the latter to weigh on growth in the near term” and look for 10-Year Bund and 10-Year gilt yields to finish ’25 at 2.30% and 3.80%, respectively.
US TSYS: Stabilization Before A Thin Docket Ahead After Last Week’s Swings
Aug-04 10:54
- Treasuries have recently pared losses to further limit moves from Friday’s close with the nonfarm payrolls report and its hugely weak two-month revisions digested. For a succinct summary of last week's swings seen after a patient Fed and weak payrolls report, see the MNI US Macro Weekly (link here).
- We touch on it more in the STIR bullet but President Trump says he will announce a new Fed Governor and BLS commissioner in the coming days following a surprise resignation/termination on Friday.
- Cash yields are 1-2bp higher on the day, with 2Y yields for instance more than 25bp before pre-payrolls levels.
- 10Y yields, currently at 4.232%, appeared to meet some support at 4.20% on Friday, touching 4.2002%. It last breached 4.20% on Jul 1 and before that late Apr/early May.
- TYU5 trades at 112-05+ (-01) having pulled back off an overnight high of 112-12, on solid cumulative volumes of 510k as non-US participants caught up with Friday’s price action.
- Friday’s rally punched through 111-14+ (Jul 22/30 high) whilst the overnight high stopped just short of resistance at a bull trigger of 112-12+ (Jul 1 high). There’s further resistance seen shortly after with 112-15 (61.8% retrace of Apr 7-11 sell-off).
- Data: Factory orders Jun (1000ET)
- Fedspeak: None scheduled
- Bill issuance: US Tsy $82B 13W, $73B 26W bill auctions (1130ET)
