CHINA: Country Wrap: Chance of Monetary Policy Changes Rising.
- China is looking to utilize its monetary tools to provide further support to the growing economic recovery with RRR cuts, new tools and potentially cutting the LPR rates for mortgage borrowers (source: BBG).
- China's Minister of Commerce Wang Wentao on Monday met with Airbus CEO, the Ministry of Commerce (MOFCOM) said in a statement on Tuesday. The latest move added to the recent frequent meetings between MOFCOM officials and foreign enterprises' representatives. The world's economic development faces severe challenges, yet China's economy boasts strong resilience, tremendous potential and abundant vitality. Its long-term positive trajectory remains unchanged, and China is confident in continuing to achieve stable growth targets, Wang noted. (source: Global Times)
- China’s bourses are mixed with the Hang Seng holding on to slender gains up +0.15%, the CSI 300 +0.05 whilst the Shanghai Comp fell -0.06% and Shenzhen is down -0.20%.
- CNY: Yuan Reference Rate at 7.1697 Per USD; Estimate 7.2223
- Bonds: a rally today in the CGB 10YR down 1bp to 1.88%
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CHINA: Futures Move Up as Cash Yields Move Higher.
- In what seems to be a rare occurrence these days, the China 10YR future rose +0.08 today to be at 108.91.
- The 10YR future has been oscillating within the midpoint of the 20-day EMA of 109.11 and the 50-day EMA of 108.63.
- China’ s 2YR future rallied also by 0.04 but too remains within the midpoint of the 20-day EMA of 102.71 and the 50-day EMA of 102.73.
- Key data out for China this week is the MLF Rate where no change is expected, new and used home prices ending the week with the 1 and 5-year Loan prime rate where again no change is expected.
EURUSD TECHS: Key Resistance Remains Exposed
- RES 4: 1.0630 High Dec 6
- RES 3: 1.0594 Dec 9 ‘24
- RES 2: 1.0533 High Jan 27 and a reversal trigger
- RES 1: 1.0514 High Feb 14
- PRICE: 1.0487 @ 05:44 GMT Feb 17
- SUP 1: 1.0393 20-day EMA
- SUP 2: 1.0280/0141 Low Feb 10 / 3 and the bear trigger
- SUP 3: 1.0138 1.764 proj of the Sep 25 - Oct 23 - Nov 5 price swing
- SUP 4: 1.0031 2.00 proj of the Sep 25 - Oct 23 - Nov 5 price swing
EURUSD is holding on to its recent gains. A short-term bull theme remains intact and last week’s gains have reinforced current conditions. The move higher also strengthens a short-term reversal signal on Feb 3 - a hammer - and suggests scope for an extension near-term. The pair has breached the 50-day EMA, at 1.0430. This has exposed 1.0533, the Jan 27 high. Initial firm support lies at 1.0280, the Feb 10 low.
BUND TECHS: (H5) Approaching Trendline Support
- RES 4: 134.94 High Dec 17
- RES 3: 134.54 61.8% retracement of the Dec 2 - Jan 14 bear leg
- RES 2: 134.29 High Dec 20
- RES 1: 132.99/133.71 50-day EMA / High Feb 5
- PRICE: 132.36 @ 05:25 GMT Feb 17
- SUP 1: 132.05/62 Trendine drawn from the Jan 15 low / Low Jan 31
- SUP 2: 131.59 61.8% retracement of the Jan 14 - Feb 5 bull leg
- SUP 3: 131.00 Low Jan 24 and a key short-term support
- SUP 4: 130.28 Low Jan 15 and the bear trigger
The recent pullback in Bund futures resulted in a move through the 20-day EMA - currently at 132.63. This continues to signal scope for a deeper retracement and attention is on 132.05, a trendline drawn from the Jan 15 low. Clearance of the line would expose a key support at 131.00, the Jan 16 / 24 low. For bulls, a stronger resumption of gains would refocus attention on the bull trigger at 133.71, Feb 5 high.
