BRAZIL: Industrial Production Below Expectations In February
Apr-02 12:01
* "*BRAZIL FEB. INDUSTRIAL PRODUCTION FALLS 0.1% M/M; EST. +0.3%" - BBG * Follows no change m/m in...
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US TSYS: 2Y Yields Holding Close To 4% After First 3% Handle Since Oct
Mar-03 11:58
- Treasuries have pared Friday’s gains, in possibly some reversal of month-end flows but also clear spillover from EGBs today. They opened lower on expectations for European defense spending (following weekend sources pieces from both Reuters and MNI) and extended the move more recently.
- Today’s focus is on any last-minute tariff concessions ahead of tonight’s deadline plus potential highlights from US manufacturing surveys and hawkish Fedspeak.
- Cash yields are 3.7-4.4bp higher on the day, led by 10s, but are still low by recent standards.
- For example, 2Y yields at 4.026% have only lifted modestly after Friday’s low of 3.98% saw the first sub-4% handle since October.
- TYM5 trades at 110-29 (-06), having remained within Friday’s range throughout on solid cumulative volumes of 515k.
- It eases back from Friday’s 111-09+, which forms initial resistance before 111-13 (Dec 10 high). The trend structure remains bullish but there is also some air above support at 110-00 (Feb 7 high and recent breakout point) should growth metrics in today’s business surveys surprise stronger.
- Tariffs: Previously delayed tariffs on Canada and Mexico set to come into effect 0001ET on Tuesday.
- Data: S&P Global US PMI Feb final (0945ET), ISM mfg Feb (1000ET)
- Fedspeak: Musalem (1235ET)
- Bill issuance: US Tsy to sell $76bn 13-week, $68bn 26-week (1130ET)
OUTLOOK: Price Signal Summary - USDJPY Resistance Remains Intact For Now
Mar-03 11:55
- In FX, EURUSD has started the week on a bullish note. However, the pair remains below the Feb 26 high and - for now - gains appear corrective. Recent weakness resulted in a breach of 1.0401. This highlights a possible bearish reversal signal. A move lower would open 1.0272, Feb 4 low. Key short-term resistance is 1.0533, the Jan 27 high. A clear breach of this hurdle would reinstate a bull theme and open 1.0630, the Dec 6 high.
- A bullish trend condition in GBPUSD remains intact - for now - and this suggests the latest pullback is likely a correction. Note that moving average studies have recently crossed into a bull-mode position, highlighting a potentially stronger bull cycle. Initial firm support to watch is 1.2538, the 50-day EMA. A resumption of gains would open 1.2767, the 50.0% retracement of the Sep 26 ‘24 - Jan 13 bear leg.
- A bearish theme in USDJPY remains intact and short-term gains are considered corrective. Support at 148.65, the Dec 3 ‘24 low, has recently been pierced. A clear break of this level would strengthen the bearish condition and pave the way for a move towards 146.95, 61.8% of the Sep 16 ‘24 - Jan 10 bull leg. Initial firm resistance to watch is 151.47, the 20-day EMA. A break of it would suggest scope for a stronger correction.
LOOK AHEAD: Monday Data Calendar: S&P Mfg PMIs, ISMs, Fed Speak
Mar-03 11:40
- US Data/Speaker Calendar (prior, estimate)
- 3-Mar 0945 S&P Global Mfg PMI (51.6, 51.6)
- 3-Mar 1000 ISM Mfg (50.9, 50.8)
- 3-Mar 1000 ISM Prices Paid (54.9, 56.3)
- 3-Mar 1000 ISM Orders (55.1, 54.6)
- 3-Mar 1000 ISM Employment (50.3, 50.1)
- 3-Mar 1000 Construction Spending MoM (0.5%, -0.1%)
- 3-Mar 1130 US Tsy $76B 13W, $68B 26W bill auctions
- 3-Mar 1235 StL Fed Musalem on economy, mon-pol (text, Q&A)
