FOREX: USDJPY Price Action Points Towards Renewed Test of 155.00
Nov-17 10:26
- The first session of the week provides some consolidation following Friday's volatility. The US dollar advanced against most others in G10 and SEK outperforms again, while the Euro and the likes of NZD and AUD weaken amid headline drivers remaining light.
- Amid reports on a fiscal easing package, price action in USDJPY points towards a renewed challenge to the 155.00 handle. The pair saw three highs around there recently ahead of Friday's temporary dip. Renewed upside would put sights on 155.53, a Fibonacci projection. Initial support to watch is 153.30, the 20-day EMA. Remember that Japanese authorities have recently stepped up their rhetoric on JPY valuations but stopped short of phrases historically associated with intervention for now.
- The extension of downward momentum in EURSEK is helping narrow the gap to an important support zone around 10.9000. A clear break of this level would expose 10.8000, which aligns closely with the April 4 low (10.7941). The case for continued SEK outperformance is largely tied to the growth differential channel. Recent domestic data have supported these arguments, with Swedish activity being supported by stimulative monetary policy, incoming fiscal stimulus and lower trade policy uncertainty.
- EURCHF closed last week at 0.9227, above a mid-term resistance zone after piercing 0.9200 for the first time since the withdrawal of the 1.20 floor in 2015. With today's price action lacking impetus following the weaker-than-expected Q3 Swiss flash GDP print, a few short-term signals suggest there may be scope for a bounce near-term for the cross.
- The trend is in oversold territory, and Friday's price pattern is a hammer candle - a potential short-term reversal signal. If the cross does recover, scope would be for a climb towards 0.9275, the 20-day EMA and 0.9298, the 50-day EMA. Key support lies at 0.9180, Friday's low and the bear trigger.
- Canada CPI, US empire manufacturing and construction spending highlight the data calendar for today alongside a set of Fed, ECB and BoE speakers.
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LOOK AHEAD: US Week Ahead Headlined By Delayed CPI Report On Friday
Oct-17 20:51
- The September US CPI report will be released on Friday, delayed amidst the government shutdown but with the BLS making a special exception on social security payment considerations.
- Bloomberg consensus looks for headline CPI inflation at a rounded 0.4% M/M after 0.38% back in August and for Y/Y inflation to firm two tenths to 3.1% for what would be its highest since May 2024.
- Core inflation is seen at a rounded 0.3% M/M after 0.35% in August (exceeding the median unrounded estimate of 0.31%) and 0.32% in July. It’s expected to see core CPI inflation hold at 3.1% Y/Y having in August increased to its highest since February.
- Core details should see focus on both goods and services angles: underlying goods inflation has clearly firmed in recent months on tariff pressures although the median increase has currently seen a peak back in June, whilst services will be watched for any spillover after some strong recent non-housing readings.
- The report will come within the FOMC blackout period ahead of the Oct 28-29 decision, with a 25bp cut fully priced and likely needing a large surprise to alter this.
- As for broader inflation details, Fed Chair Powell this week confusingly suggested that we will have the September PPI report but the BLS had previously said “No other releases will be rescheduled or produced until the resumption of regular government services”.
US DATA: Latest Jobless Claims Estimates During The Shutdown
Oct-17 20:30
As noted earlier, MNI estimates initial jobless claims at a seasonally adjusted 218k in the week to Oct 11 and continuing claims at a seasonally adjusted 1929k in the week to Oct 4.
- To give a better idea of sensitivity around these estimates, which rely on estimates for some missing states, we note the below analyst estimates:
- Goldman Sachs have a central estimate of 217k for initial claims in a range of 211-225k, whilst they see continuing claims at 1917k in a range of 1885-1930k.
- JPMorgan meanwhile also see 217k for initial claims whilst they see continuing claims as having held constant at 1927k.
NATGAS: Venture Global in Talks with Ukraine for more LNG Deliveries, Reuters
Oct-17 20:28
Ukraine is seeking more cargoes from Venture’s Plaquemines facility as the embattled nation approaches the winter heating season, according to Reuters sources
- Venture is in talks with Ukraine’s DTEK to procure more LNG cargoes after a year of gas infrastructure attacks by the Russians.
- Venture Global CEO Michael Sabel met with President Volodymyr Zelenskiy on Thursday October 16.
- DTEK signed an agreement in 2024 for an undisclosed amount of LNG from the facility, as well as 2 mtpa from Calcasieu Pass Phase 2 currently under construction.
- Plaquemines currently has spare capacity to deliver more cargoes to Ukraine on the spot market, per Reuters.
- Plaquemines now sends out the second highest LNG volume in the US, with feedgas demand averaging 3.45 bcf/d according to MNI figures.
