US: White House Pans 'Extreme' 'Time Wasting' Republican Govt Funding Plan

Sep-09 17:37

The White House has issued a statement panning House Speaker Mike Johnson's (R-LA) plan to fund federal government agencies for six months. The GOP package includes a partisan bill requiring Americans to prevent citizenship ID when registering to vote that is strongly opposed by Democrats. The White House described the plan as, "wasting time with extreme policies and a potentially harmful long-term continuing resolution (CR)."

  • The White House said: "The House Republicans’ long-term CR abdicates their responsibility to the American people. It would erode our national defense... and undermine programs that support small businesses while making wealthy tax cheats pay what they owe."
  • White House: "Operating under a six-month CR erodes the U.S. military advantage, undermines the United States in our competition with China, degrades readiness, and fails to support our troops."
  • The White House statement is an attempt to get ahead of Republican messaging by framing the GOP package as detrimental to national security. The statement could provide some cover for frontline Democrats to vote no on a bill that Republicans claim will safeguard voter integrity and bolster confidence in the electoral system.
  • The funding package is expected to come up for a vote in the House on Wednesday at the earliest, assuming it passes the House Rules Committee this evening. If the package passes the House, it will likely be returned by the Senate stripped of partisan riders and shrunk to a short-term measure to extend funding into December.

Historical bullets

USDCAD TECHS: Pierces The 50-Day EMA

Aug-09 20:00
  • RES 4: 1.4048 High May 22 2020 
  • RES 3: 1.4000 Round number resistance 
  • RES 2: 1.3977 High Oct 13, 2022   
  • RES 1: 1.3856/3946 High Aug 6 / 5 
  • PRICE: 1.3729 @ 16:36 BST Aug 9
  • SUP 1: 1.3731/18 50-day EMA / Intraday low 
  • SUP 2: 1.3657 Low Jul 17
  • SUP 3: 1.3589 Low Jun 11 and a key support
  • SUP 4: 1.3547 Low Apr 9 

Trend conditions in USDCAD remain bullish and recent gains reinforce this theme. A key resistance at 1.3846, the Apr 16 high, has been cleared. This signals scope for 1.3977, the Oct 13 ‘22 high. Near-term, the pair has pulled back from Monday’s high. A move lower appears to be a correction and is allowing an overbought condition to unwind. The 50-day EMA, at 1.3731, has been pierced. A clear break would expose 1.3657, the Jul 17 low.

 

US TSYS: Curves Twist Flatter, Rate Cuts Cool As Recession Concerns Ease

Aug-09 19:21
  • Treasuries are mostly firmer after the bell, curves flatter (2s10s -5.920 at -11.155) with the short end underperforming on a relatively quiet end to a hectic week with no scheduled data, Fed speak or Tsy supply Friday.
  • Treasury futures spiked higher early in the week as recession concerns climbed following last Friday's employment data, 10Y futures surge to 115-03.5 high Monday, 10Y yield fall to 3.6653% low.
  • Markets spent the rest of the week scaling back support as recession cares cooled.
  • Tsy Sep'24 10Y futures currently trade +8 at 112-29, vs. 112-21, well below technical resistance at 114-03/115-03+ (High Aug 6 / 5 and the bull trigger).
  • Projected rate cut pricing into year end were well off Monday's highs (*): Sep'24 cumulative -39.4bp (-54.3bp), Nov'24 cumulative -70.5bp (-95.9bp), Dec'24 -102.2bp (-128.1bp).
  • Focus on next week's PPI, CPI, Retail Sales, Home sales data and UofM inflation expectations.

EURJPY TECHS: Outlook Remains Bearish

Aug-09 19:00
  • RES 4: 167.44 50-day EMA
  • RES 3: 164.75 20-day EMA    
  • RES 2: 162.89 High Aug 1       
  • RES 1: 161.59 High Aug 2
  • PRICE: 160.03 @ 16:31 BST Aug 9
  • SUP 1: 157.30 / 154.42 Low Aug 6 / 5 
  • SUP 2: 153.87 Low Dec 14 ‘23 
  • SUP 3: 153.23  Low Dec 7 ‘23 and a key support 
  • SUP 4: 151.42 Low Jul 28 ‘23

EURJPY traded sharply lower Monday marking an extension of the current impulsive bear cycle, before recovering from the session low. The move down opens the next key support at 153.23, the Dec 7 ‘23 low. A break of this price point would strengthen a bearish theme. Note that the cross remains in an extreme oversold position. A stronger recovery would allow this to unwind. Initial resistance is seen at 161.59, the Aug 2 high.