CHILE: USDCLP Gains Considered Corrective, BCCh Economist Survey Due
Jul-10 11:24
- The Chilean peso underperformed yesterday as copper pulled back slightly after spiking sharply higher on Tuesday following Trump’s 50% copper tariff threat. USDCLP closed 0.8% higher just below the 950 level, leaving the pair near to the top of its recent range.
- Copper futures have rebounded today, however, which may provide a tailwind for the peso. The red metal is up by ~2.5% at $563/lb, taking gains since Tuesday’s tariff announcement to around 12%.
- Gains this week have seen copper break key resistance at $546.15, the March 26 high reinforcing the current primary uptrend. Sights are on a retest of Tuesday’s high at $589.55. Clearance of this level would open the $600.00 handle.
- For USDCLP, a bear threat remains present and recent gains are considered corrective. Scope is seen for a deeper retracement towards 914.00, the March 18 low. Resistance to watch is 953.35, the June 23 high.
- On the data front today, the BCCh will publish its economist survey at 1330BST(0830ET), which will include interest rate forecasts ahead of the July 29 MPC meeting. The equivalent traders survey earlier this week revealed that market participants expect a 25bp cut to 4.75% later this month, followed by another 25bp cut in September.
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OUTLOOK: Price Signal Summary - Gilts Bull Cycle Intact
Jun-10 11:24
- In the FI space, the trend condition Bund futures remains bullish. The recovery that started May 14 suggests the move down between Apr 22 - May 14, has been a correction. A stronger resumption of gains would signal scope for a climb towards 131.85, the Apr 22 high. Key short-term support to watch is 128.97, the May 14 low. First support lies at 130.12, the Jun 5 low.
- Gilt futures continue to trade closer to their recent highs. The latest rally undermines the recent bearish theme - a key short-term resistance at 91.87, the May 20 high, has been cleared. This signals scope for an extension higher and sights are on 92.79, the 1.236 projection of the May 22 - 27 - 29 price swing. Initial firm support to watch is unchanged at 91.44, the Jun 4 low. A break of this level is required to signal a possible reversal.
BONDS: Bund is testing a new intraday high
Jun-10 11:20
- The German tests a new intraday high, 7k cumulative volume goes through in the past few minutes, but overall Volume are still on the low side.
- TYU5 is seeing just 237k traded lots for the session, which is tiny, as investors await on the US CPI Tomorrow, or fresh Trade news.
- For the German Bund, resistance are seen at 131.00, 131.28, 131.50.
FOREX: EURGBP Breaches Key Short-Term Resistance
Jun-10 11:03
- The softer-than-expected UK data continues to weigh on sterling Tuesday, and the aforementioned EURUSD demand below 1.14 keeps EURGBP within close proximity of prior session highs at 0.8465.
- While there was a big miss for the very volatile flash PAYE RTI payrolls number at -109k for May, UK wage data were all a bit softer than expected as well, including the key private regular AWE that was two tenths below consensus.
- EURGBP currently stands 0.40% higher on the day, and in the process has breached a key short-term resistance at 0.8440, the 50-day EMA. A clear break of the average is required to highlight a stronger reversal, potentially exposing 0.8541, the May 02 high.
- Dips below the 0.8400 handle have been well supported in recent months, and key support has been defined at 0.8356, the May 29 low. Clearance of this level would be required to resume the technical downtrend.
- In the UK, immediate attention turns to Wednesday’s Spending Review, Thursday’s release of April GDP and the quarterly consumer BOE/Ipsos Inflation Attitudes Survey on Friday.
