KRW: USD/KRW - Is Upward Momentum Stalling ?

ACGBs (YM -3.0 & XM -3.5) are slightly weaker despite cash US tsys closing last week on a firm note, with US yields flat to 3bps richer and the curve steeper.

• Reminder, Japan Holiday today, Culture Day, should keep Trade on the quiet and thin side until at least London arrives.
• NI Policy: RBA Board To Hold, Push Out Midpoint Return. The Reserve Bank of Australia Board is expected to keep the cash rate at 3.6% next Tuesday, following stronger-than-expected Q3 inflation. It is likely to push back the anticipated return of inflation to the midpoint in updated forecasts released alongside the decision.
• Cash ACGBs are 3-4bps cheaper with the AU-US 10-year yield differential at +25bps.
• The bills strip is -2 to -3 across contracts.
• RBA-dated OIS pricing is showing a 25bp rate cut in November at a 3% probability, with a cumulative 3bps of easing priced by year-end.
• Today, the local calendar will see the Melbourne Institute Inflation Gauge shortly.
• The AOFM plans to sell A$1200mn of the 4.25% 21 March 2036 bond on Wednesday and A$800mn of the 3.00% 21 November 2033 bond on Friday.

• RES 3: 140.08 High Jun 13  
• RES 2: 139.05 High Aug 4 
• RES 1: 137.30 - High Sep 8 and key short-term resistance
• PRICE: 135.96 @ 16:17 GMT Oct 31
• SUP 1: 135.61 - Low Oct 08 
• SUP 2: 135.39 - 1.618 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)
• SUP 3: 134.69 - 2.000 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)  

Prices started last week well, growing the gap with next support into the 135.61 Oct 08 low. Despite this stability, prices remain inside the firm downtrend that’s dominated prices since mid-September, and prices will need to challenge resistance before signaling any broader reversal. Key short-term resistance has been defined at 137.30, the Sep 8 high. Further weakness would open 135.39 next, a Fibonacci projection. 

The S&P(ESZ5) Friday night range was 6843.50 - 6918.50, SPX closed +0.26%, Asia is currently trading around 6890.00. The E-Mini’s chopped around sideways on Friday unable to gain push higher after much better than expected results from both Amazon and Apple. This morning has seen stocks open higher, E-minis(S&P) +0.20%, NQZ5 +0.20%. The market is clearly in a powerful uptrend, though there are signs of some short-term exhaustion and most of the stubborn shorts have been forced back into the market as data shows active managers are back to being 100% invested in the stock market. 

• Barchart on X highlights how “Warren Buffett's Berkshire Hathaway has now dumped stocks for 12 consecutive quarters, the longest selling streak in its history. It is now sitting on an all-time high $382 Billion in Cash, enough to buy 477 companies in the S&P 500.” See Graph Below

Fig 1: Berkshire Sells Stocks For The 12th Quarter

Source: MNI - Market News/@Barchart