USDCAD TECHS: Watching Support
- RES 4: 1.3729 76.4% retracement of the Nov 1 - Dec 27 bear leg
- RES 3: 1.3661 High Nov 27
- RES 2: 1.3623 61.8% retracement of the Nov 1 - Dec 27 bear leg
- RES 1: 1.3606 High Feb 28 and the bull trigger
- PRICE: 1.3505 @ 08:02 GMT Mar 7
- SUP 1: 1.3495 50-day EMA
- SUP 2: 1.3441/3359 Low Feb 22 / Low Jan 31 and key S/T support
- SUP 3: 1.3343 Low Jan 12
- SUP 4: 1.3288 Low Jan 5
USDCAD conditions remain bullish despite the sharp sell-off yesterday. Key support lies at 1.3359, the Jan 31 low. Clearance of this level would be bearish. Initial firm support to watch lies at 1.3441, the Feb 22 low. The recent print above resistance at 1.3586, the Feb 13 high and bull trigger is a positive development. A clear break of this level would confirm a resumption of the uptrend and open 1.3623 initially, a Fibonacci retracement.
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GILTS: Opening calls
Gilt calls, range 98.18/98.22.
EQUITIES: Focus turns to the EU Cash open
Some focus on the Equity open today, with VGH4 making multiple attempts over the past 5-6 sessions at the 4700.00 level, printed a 4698.00 so far today:
- Cash calls: Estox 50: +0.55%, Dax: +0.39%, CAC: +0.49%, FTSE +0.91%, SMI +0.81%.
STIR: SONIA Futures A Little Firmer
The uptick from yesterday’s worst levels in wider core global FI markets has a dovish feedthrough into SONIA, leaving futures flat to +5.0, as the late reds and greens lead the move higher.
- BoE-dated OIS softens by 0.5-2.5bp, showing ~86bp of cuts for '24.
- A reminder that even though some snips of BoE chief economist Pill’s late Monday address read dovishly (supply side constraints limit GDP growth, no expectations for a meaningful pick-up in economic activity, while noting that interest rates would be at a restrictive level even if cuts took place) he stressed that he is not yet confident enough re: the inflationary outlook to be comfortable with cutting rates. He described any futures rate cuts as a “reward” for lowering inflation. All in, he sounded less hawkish than he did on Friday, noting that the outlook for monetary policy has “shifted,” albeit alongside flagging some worry for upside re: inflation.
- BRC like-for-like sales data was a touch firmer-than-expected, but the Y/Y print still registered the lowest level seen since ’22.
- The BoE’s quarterly APF report headlines a very slim local release docket on Tuesday. That shouldn’t be a needle mover. Elsewhere, the DMO will come to market in the long end of the gilt curve.
| BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| Mar-24 | 5.175 | -1.4 |
| May-24 | 5.106 | -8.3 |
| Jun-24 | 4.991 | -19.8 |
| Aug-24 | 4.827 | -36.2 |
| Sep-24 | 4.677 | -51.2 |
| Nov-24 | 4.479 | -71.0 |
| Dec-24 | 4.332 | -85.7 |
