US TSYS: Weaker on Narrow Range, Crude Cycle Highs, Canada Tariff Relief?

• US equity indexes hold weaker levels late Wednesday, near lows after higher than expected flash PMI data and a rebound in crude prices weighed on risk sentiment.
• Stocks held a relatively narrow range since midday with DJIA currently -0.6%, SPX emini -0.7%, Nasdaq -1.1%.
• Consumer Discretionary sector shares led declines in the second half, travel-related shares weighing: Airbnb Inc -6.11%, Expedia Group -5.99%, 
  Booking Holdings -4.49% and Royal Caribbean Cruises -3.08%.
• Of note, McDonald's Corp fell -4.99%, analysts citing lackluster forecast tied to accelerating inflation. Investors also expressed concerns over a $8.5 billion franchisee support plan through 2036, which pressures short-term cash flow despite aiming for long-term modernization and a 50% operating margin by 2030.
• On the positives side, the Energy sector was buoyed by oil and gas stocks as crude prices rebounded: APA Corp +3.24%, Devon Energy +3.13%, ConocoPhillips +2.43% and Occidental Petroleum Corp +2.01%.

• RES 4: 184.09 61.8% retracement of the Aug 21 - Sep 14 bear leg 
• RES 3: 182.56 50-day EMA
• RES 2: 181.93 50.0% retracement of the Aug 21 - Sep 14 bear leg  
• RES 1: 181.55 High Sep 18 
• PRICE: 180.36 @ 17:00 BST Sep 23
• SUP 1: 178.94/177.85 Low Sep 18 / Low Sep 14 and bear trigger
• SUP 2: 177.15 Low Nov 10 2025 
• SUP 3: 176.01 1.236 proj of the Jul 29 - Aug 3 - 21 price swing  
• SUP 4: 175.29 38.2% retracement of the Feb 28 ‘25  - Apr 17 bull leg    

EURJPY is holding on to the bulk of its recent gains. Despite the move higher - a correction - a bearish trend theme remains intact. However, the latest climb has delivered a print above 180.87, the 20-day EMA. A clear break of this hurdle would signal scope for a stronger recovery, potentially towards the 50-day EMA, at 182.56. MA studies are in a bear-mode position, highlighting a dominant downtrend. The bear trigger lies at 177.85, the Sep 14 low.        

The Atlanta Fed's Business Inflation Expectations survey saw 1Y ahead expectations for unit costs increase to technically the highest since mid-2025 although they remain off recent highs seen after the tariff announcements earlier in 2025 and certainly below those in 2022. Separately, labor plans are seen as steady. 

• Firms' 1Y inflation expectations (defined as the mean expected changed in unit costs) increased two tenths to 2.37% in September, technically poking above the 2.36% from May for its highest since Jun 2025.
• It had previously seen a recent low of 1.94% in Feb (lowest since Dec 2020) before the start of the US-Iran war whilst for longer context, it previously peaked at 2.76% in Apr 2025 after tariff announcements and 3.8% in Mar-Apr 2022.
• The quarterly question on long-term inflation expectations 5-10Y ahead was unchanged at 2.8% meanwhile, holding to the pre-pandemic average.
• A review of the labor-focused special question: “Overall, most firms indicated that they anticipate either little to no changing in staffing or plan to increase levels over the next year. When looking at the growth rates in employment across sectors, manufacturing and corporate services anticipate the strongest growth going forward. Wages have steadily increased over the past 12 month and are expected to continue to increase over the next 12 months. However, this growth rate when compared to the present inflation rate isn’t nearly as strong.”