EM LATAM CREDIT: "Paraguay Outlook to Positive S&P; FC L-T Rating Affirmed" -BBG
Jan-09 12:27
"Paraguay Outlook to Positive by S&P; FC L-T Debt Rating Affirmed" - BBG
PARGUY 5.4% 2050, $82.35, -.02
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OUTLOOK: Price Signal Summary - Pullback In Gilts Extends
Dec-10 12:26
- In the FI space, a bull cycle in Bund futures remains intact and the latest pullback is considered corrective. A move down is allowing an overbought trend condition to unwind. For bulls, price has recently traded through 136.37, the 76.4% retracement of the Oct 1 - Nov 6 bear leg. A clear break of this level strengthens a bullish theme and opens 137.72, the Oct 1 high. Initial firm support lies at 135.41, the 20-day EMA.
- Gilt futures are trading lower today and this has resulted in a move through initial support at 95.49, the Dec 4 low. The next level to watch is 95.17, the Nov 28 low and today’s intraday low, so far. A continuation down would expose key support at 93.40, the Nov 18 low. A breach of this support would be a bearish development and highlight a reversal. Key resistance and the bull trigger is 96.54, the Dec 3 high.
GILTS: Seeing a clear pick up in Volumes
Dec-10 12:17
- There's clearly some notable volumes going through in Gilt to the Downside, more long bailing out could be in part the driver after the contract broke through the December, but the contract has already traded half the volume that has been seen in the past 7 sessions.
- Gilt is testing the next immediate support at 95.17 Low Nov 28, so far holding.
FOREX: USDJPY Extends Recovery to 20-day EMA, Tankan Survey This Week
Dec-10 12:16
- Further upward pressure on core yields have further weighed on the Japanese Yen Tuesday, with USDJPY extending the most recent recovery to around 2.1%. While the moves have likely been supported by the most recent news from China, it is also worth noting the impending decision for the Bank of Japan next week.
- MNI highlighted last week that the potential political reaction to rate hikes is making senior Bank of Japan officials tend towards normalising policy more slowly, despite data showing it is moving towards achieving its inflation target.
- Furthermore, the Bank’s concerns over politics, and also over how markets might react to higher rates, means that an increase to the 0.25% policy rate at the Dec 18-19 meeting will be unlikely unless USDJPY were to strengthen to ~160 against the dollar.
- Spot is now trading close to pre-election levels and the latest strength has narrowed the gap to initial resistance at 151.70, the 20-day EMA. A close back above this average would bolster the case for a more protracted recovery to the bull trigger at 156.75, Nov 15 high.
- This week’s Tankan survey will also remain significant for the BOJ board, ahead of its December 19 decision.
