CZK: Koruna Stays On Defensive Despite Trimming Losses
Nov-06 10:26
EUR/CZK trades +0.024 at 25.349 after easing off its intraday high of 25.449. The electoral victory of Donald Trump in the US keeps CE3 FX under pressure amid lingering geopolitical concerns. From a technical standpoint, a clearance of Aug 1 high of 25.535 would signal that bulls remain in control. Bears look for a retreat past the 50-DMA, which intersects at 25.208.
- Czechia's Finance Ministry cut its 2025 GDP growth forecast to +2.5% Y/Y from +2.7% predicted in August. The Ministry warned that the risks to the forecast are skewed to the downside, due to potential supply chain disruptions and continued weakness of the German economy.
- Czechia's industrial output rose by 3.9% Y/Y in September, topping the +2.4% median estimate. Trade surplus widened to CZK21.3bn, slightly less than expected. Construction output fell by 7.1% Y/Y, with Komercni banka calling it a "big disappointment" and pointing to the adverse impact of weather conditions.
- The Czech National Bank will announce its monetary policy decision tomorrow at 13:30GMT/14:30CET and is expected to cut the two-week repo rate by 25bp.
- CZGB yields have ticked lower across the curve. The PX Index refreshed cyclical highs at 1,684 and last sits 0.6% above neutral levels.
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OUTLOOK: Price Signal Summary - USDJPY Bull Cycle Remains In Play
Oct-07 10:22
- In FX, the trend outlook in EURUSD traded lower Friday and a softer tone remains intact. The pair has traded through support at 1.1002, the Sep 11 low and what appears to be the midpoint of a double top reversal pattern on the daily chart. The break lower strengthens a bearish theme and signals scope for weakness towards 1.0945 next, 61.8% of the Aug 1 - Sep 25 bull leg. First resistance is at 1.1041, the 50-day EMA.
- GBPUSD maintains a softer short-term tone following last week’s sell-off and the pair is trading lower again, today. Price has breached support at the 20-day EMA and pierced the 50-day EMA at 1.3114. A clear break of this average would strengthen a bearish threat and open 1.3049, 50.0% of the Aug 8 - Sep 25 bull leg. Clearance of this level would expose 1.3002, the Sep 11 low. Initial resistance to watch is 1.3231, the 20-day EMA.
- USDJPY traded higher Friday, as the pair extended the rally that started Sep 16, and price is trading at the latest highs. Last week’s gains resulted in a break of the 50-day EMA. This undermines a recent bearish theme and highlights a stronger reversal. Sights are on 149.39, Aug 15 high. Clearance of this level would strengthen the bullish theme. Initial firm support is 144.61, the 20-day EMA. A break of the average is required to signal a reversal.
LOOK AHEAD: Monday Data Calendar: Bill Sales, Fed Speak, Mnthly Budget Statement
Oct-07 10:20
- US Data/Speaker Calendar (prior, estimate)
- Oct-7 1130 US Tsy $81B 13W, $72B 26W bill auctions
- Oct-7 1300 Fed Gov Bowman moderated discussion bankers conf
- Oct-7 1350 MN Fed Kashkari participates in Q&A
- Oct-7 1500 Consumer Credit ($25.452B, $12.000B)
- Oct-7 #### Monthly Budget Statement (-$380.1B rev, $4.3B)
- Oct-7 1800 Atl Fed Bostic moderated conversation
- Oct-7 1830 StL Fed Musalem Speaks on economy/policy (text, Q&A)
US TSY FUTURES: CFTC Shows Hedge Funds Covering Some Shorts In US Futures
Oct-07 10:19
The latest CFTC CoT report pointed to a mix of net short setting and trimming, with net short non-commercial positioning remaining evident in all contracts.
- Levered names pared some of their shorts in US futures but added to shorts across the remainder of the curve. Levered names remain net short across the curve.
- Asset managers generally took the other side of those trades, paring net longs in US futures, while adding to net longs across the remainder of the curve. Asset managers remain net long across the curve.
- A reminder that the survey captured reaction to Fed Chair Powell’s address at the NABE, PCE data and the ISM manufacturing survey.
- CFTC positioning metrics will be skewed by the presence of basis trades.
Source: MNI - Market News/CFTC/Bloomberg
