LATAM FX: LATAM FX Price Signal Summary – USDMXN Clears Key Support
Mar-14 14:13
- The medium term trend condition in USDMXN remains bullish, however, the pair has this week breached a key support at 20.1343, the Jan 24 low. The break lower highlights a stronger bear cycle and even a potential reversal. A continuation lower would expose 19.7618, the Nov 7 ‘24 low. Further out, a sell-off would also signal scope for an extension towards 19.1120, the Oct 4 ‘24 low. Initial firm pivot resistance is at 20.4002, the 50-day EMA.
- A bearish trend cycle in USDBRL remains in play and recent short-term gains are - for now - considered corrective. The pullback from the Feb 28 high signals the end of the Feb 18 - 28 corrective cycle. A continuation lower would open 5.6755, the Feb 18 low and a short-term bear trigger. Clearance of this level would expose 5.6340, the Nov 7 low, and the 5.6000 handle. Key short-term resistance has been defined at 5.9179, the Feb 28 high. A break of this hurdle would be a bullish development.
- USDCLP remains in a bear-mode condition and the latest sell-off reinforces this theme. Sights are on 921.59, the 76.4% retracement of the upleg between Sep 27 ‘24 - Jan 3. A break of this level would expose 891.28, the Sep 27 2024 low. Firm resistance is seen at 958.99, the 50-day EMA. The 20-day EMA, an initial resistance, is at 945.02.
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US TSY FUTURES: BLOCK: March'25 2Y Buy
Feb-12 14:13
- +9,000 TUH5 102-18, buy through 102-17.88 post time offer at 0903:45ET, DV01 $330,000. The 2Y contract trades 102-18 last (-4.38)
- Despite the weaker post-data price action, curves have extended steeper: 2s10s +3.442 at 28.010
US DATA: Booming Supercore CPI, Core Downward Revisions Limited To Core Goods
Feb-12 14:13
- The extremely strong supercore (core services ex OER & primary rents) print of 0.76% M/M sa in January followed zero revisions (to 2.d.p) for both Nov and Dec and a limited -0.04pp for Oct.
- We had seen analyst estimates between 0.38-0.45% M/M for January.
- Being its strongest since Jan 2024, when it printed 0.84% M/M, it will likely elicit further questions on residual seasonality.
- It leaves a 3-month run rate at 5.4% annualized after a downward revised 3.3% (initially 3.5%) for its strongest since April, whilst the 6-month accelerated to 4.7% from 3.60% (initially 3.66).
- As for the broader revisions to core CPI in Q4 noted earlier, they were driven by core goods with a notable -0.09pp to -0.04% M/M in Dec and -0.10pp to 0.21% M/M in Nov ahead of tariffs.
- See the below table for a survey of core goods & services SA revisions:
GILTS: Futures Through Initial Support On U.S. CPI
Feb-12 14:06
Gilts sell off on the back of the U.S. CPI data.
- Futures as low as 92.33, breaking through the 20-day EMA (92.63).
- Our technical analyst’s next support of note isn’t seen until the Jan 24 low (91.52).
- Intermediate support seen before there at the 38.2% retracement of the move from the ’25 low to ’25 high (92.29), followed by the Jan 29 low (91.96)
- Yields 5-7bp higher, curve steeper.
- 10s still 4.5bp below next resistance at the Jan 29 high (4.622%).
- 10s 2bp wider to Bunds on the day, last 209.5bp.
- BoE-dated OIS showing 56bp of cuts through year-end vs. ~58bp seen ahead of the U.S. data.
- SONIA futures +0.25 to -4.5.
