US DATA: Mortgage Applications Track Sideways
Feb-05 12:08
- MBA composite mortgage applications increased 2.2% (sa) last week after -2.0% the week prior, with refis (12%) offsetting some recent weakness for new purchases (-3.5%).
- Composite applications have broadly moved sideways since jumping 33% early in January, although are still only 48% of average 2019 levels (new purchases 61%, refis 34%).
- The 30Y conforming rate dipped 5bps to 6.97%, down from the recent high of 7.09% from the week to Jan 10 but holding most of the push higher from recent lows of 6.13% in September.
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EGB OPTIONS: Bund put buyer
Jan-06 12:03
RXG5 124p, bought for 1.5 in 2.5k.
BONDS: Paring small gains
Jan-06 11:58
- Some of the bids in Govies are starting to be met by sellers, TYH5 is sold in 3.5k FVH5 2.6k and TUH5 2.5k.
- EGBs are still mostly within ranges, and the Bund contract hasn't managed to really extend higher, after it closed its opening gap up to 132.50 earlier, printed a 132.57 high so far for the day.
- It is a very busy Week ahead, European CPIs, US Labour Data and also Heavy Supply are due this Week.
FOREX: USD Significantly Weaker Amid Report on Softening Trump Tariff Policy
Jan-06 11:52
- The Washington Post reports that US President-elect Donald Trump’s aides are "exploring plans" to apply tariffs to every country “but only cover critical imports” providing potential for slightly less protectionist U.S. trade policy. The article has bolstered the existing direction of travel for the greenback on Monday, with the USD index extending session lows and briefly bringing the DXY’s pullback to around 1.5% from last week’s highs.
- EURUSD (+1.05%) surged back above 1.0400, and notably rose above initial 20-day EMA resistance to print a 1.0432 high, having now recovered over 200 pips from the 1.0226 lows on Jan 02. Above here, 1.0458 is the Dec 30 high.
- Similar strength seen across higher beta currencies such as AUD and NZD, which extend gains to around 1% on the day. Cable has risen back above 1.25 and will look to initial firm resistance at 1.2562, the 20-day EMA.
- USDJPY also significantly knocked off its highs, reversing around 70 pips to trade closer to unchanged on the session. USDMXN (-0.80%) prints fresh session lows below 20.50.
- There will be particular focus on the Canadian dollar as betting markets shift to 95% probability of imminent PM Trudeau resignation. USDCAD is down 0.9% on the session with pullback seen as technically corrective at this juncture. Initial firm support has been pierced at 1.4320, the 20-day EMA.
- German national-level HICP & CPI inflation is scheduled to be released later today 13:00 GMT. US Final Services PMI and Factory Orders are due for release, and FOMC Member Cook will speak.
