US DATA: Core PCE Recent Trends Stabilize Above Target After Upward Revisions
Feb-28 13:52
* Core PCE eased to 2.647% Y/Y from an upward revised 2.865% Y/Y (initial 2.794%) in Dec, as it st...
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EUR: EURJPY extends losses
Jan-29 13:44
- EURJPY is quickly heading towards the previously mentioned next support seen just below the figure at 160.96, the 21st January low.
- The push lower in Equity could be somewhat supporting, although not really seeing any spillover into the likes of the Swissy, and no real movement for Yen against the Dollar, so unlikely.
- GBPJPY is also through its session low, but this Week's low is still further out, down to ~192.08.
FOREX: AUD Continues Pull Lower, Inflation Data and Equities Weigh
Jan-29 13:38
- The most recent downtick for major equity indices is helping exert some further downward pressure on the Australian dollar. AUDUSD is now 0.59% lower on the session, while AUDJPY extends declines to 0.74%.
- These latest dynamics add to the key headwind overnight, which was a lower-than-expected set of Q4 inflation data in Australia. Trimmed mean inflation printed at 0.5% q/q over Q4, 10bps below estimate, and down from Q3’s 0.8%. The measure was 3.2% on a year-end basis, down 30bp over Q3, while annual headline inflation was 2.4% y/y.
- Our overnight desk note that market pricing for the Feb RBA meeting is close to 95% priced, and it is worth highlighting that Westpac has brought forward their rate cut forecast from May to February, joining two other local banks in predicting a move on Feb 18.
- Any further hawkish communication from the FOMC tonight, and an associated continuation lower for AUDUSD, would bring the focus back on 0.6131, the Jan 13 low and the bear trigger. Below here, attention would be on 0.6045, the 1.5 projection of the Sep 30 - Nov 6 - 7 price swing. For AUDJPY, the December low at 95.52 is the first area of interest.
US TSYS: Post-Inventories React
Jan-29 13:37
- Treasuries gain slightly but hold inside relatively narrow overnight range after lower than expected Wholesale/etail inventories data, Trade gap wider than expected.
- The Mar'25 10Y contract trades 109-07 last (+6) vs. 109-09 overnight high. Initial technical resistance at 109-12 (50-day EMA) followed by 109-31 (High Dec 18). Curves mildly flatter: 2s10s -1.193 at 32.137, 5s30s -.324 at 44.040.
- Cross asset moves: BBG USD index firmer at 1303.45 (+2.26); Gold paring Tuesday gains at 27.57.27 (-6.24); Crude little lower (WTI -.23 at 73.54); SPX Eminis weaker: -16.5 at 6080.25.
