OIL: WTI Climbs to New Intraday High
Jun-13 17:32
WTI has shrugged off earlier losses to climb to a new intraday high of $78.86/b during US hours, in what has been quite a see-saw session for crude.
- WTI JUL 24 up 0.2% at 78.69$/bbl
- Support remains from lower-than-expected US PPI data, Hezbollah’s threats of further Middle East escalation, and Russian vowing to compensate for overproduction which could further taper supply.
- May PPI -0.2% M/M (0.1% expected); core PPI (ex food/energy/trade) 0% (0.3% expected)
- An earlier fall in crude was driven by a recovery in the US dollar strength, yet this is now being offset by the aforementioned bullish factors.
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GBPUSD TECHS: Returns Higher
May-14 17:30
- RES 4: 1.2754 76.4% retracement of the Mar 8 - Apr 22 bear leg
- RES 3: 1.2709 High Apr 09
- RES 2: 1.2667 61.8% retracement of the Mar 8 - Apr 22 bear leg
- RES 1: 1.2634 High May 03
- PRICE: 1.2590 @ 15:53 BST May 14
- SUP 1: 1.2446 Low May 9 and key near-term support
- SUP 2: 1.2423/2300 Low Apr 24 / 22 and the bear trigger
- SUP 3: 1.2266 Low Nov 14 ‘23
- SUP 4: 1.2239 76.4% retracement of the Oct 4 - Mar 8 bull leg
GBPUSD traded well into the Tuesday close, bouncing firmly ahead of near-term support defined at 1.2446, the May 9 pullback low. For bulls, a breach of 1.2634 would reinstate the recent upleg and open 1.2667, a Fibonacci retracement. Clearance of 1.2446 would reinstate a bearish threat and this would signal scope for an extension towards the bear trigger at 1.2300, the Apr 22 low.
STIR: Fed Rate Path Slightly Lower Than Pre PPI Levels
May-14 17:29
- Fed Funds implied rates have headed a little lower in recent trade.
- They keep to the day’s wide ranges having earlier more than reversed the initial spike on the PPI beat owing to some negative revisions and more mixed PCE-relevant components.
- Cumulative cuts from 5.33% effective: 1.5bp Jun, 7bp Jul, 21bp Sep, 29bp Nov and 44bp Dec.
- It leaves June and July meetings near unchanged from pre-PPI levels but later meeting up to 1.5bps lower - see table.
- Chair Powell kept to similar guidance from the May 1 FOMC presser when asked about the need for rate hikes: “I do think it’s really a question of keeping policy at the current rate for a longer time than had been thought. By many, many measures the policy rate is restrictive. Time will have to tell whether it’s sufficiently restrictive. Entertain the possibility, that could be a very small probability of a hike [when asked]. I have said that I don’t think that it’s likely based on the data that we have that the next move would be a hike, it’s more likely we’ll be in a place that we hold the policy rate where it is.”
STIR: FED Reverse Repo Operation
May-14 17:19
- RRP usage declines to $468.344B from $492.068B prior; number of counterparties 76. Compares to $327.066B on Monday, April 15 -- the lowest level since mid-May 2021.
NY Federal Reserve/MNI
