OUTLOOK: Price Signal Summary - Bund Bull Cycle Remains In Play
Feb-05 12:33
- In the FI space, Bund futures remain in a bull cycle and the contract has traded higher today. Price has recently cleared resistance at 132.22, the Jan 22 high, and is through both the 20- and 50-day EMAs. The break higher confirms a resumption of the corrective bull cycle that started Jan 14. This signals scope for an extension towards 133.73, 50.0% of the Dec 2 - Jan 14 bear leg. Firm short-term support has been defined at 131.00, the Jan 16 / 24 low. First support is at 132.23, the 20-day EMA.
- A bullish corrective phase in Gilt futures remains in play, signalling scope for a continuation higher near-term. Last week’s high print and Monday’s climb, reinforce current conditions. The contract has traded through 93.09, the Dec 20 high. Sights are on 93.64, 61.8% of the Dec 3 - Jan 13 bear leg. First support is 92.17, the 20-day EMA.
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US TSY FUTURES: US$ Debt Issuance Roundup: Saudi Arabia, SocGen, MUFG on Tap
Jan-06 12:29
- Date $MM Issuer (Priced *, Launch #)
- 01/06 $Benchmark Saudi Arabia 3Y +120a, 6Y +130a, 10Y +140a (for context: Saudi Arabia last issued $5B sukuk on May 28: $1.25B 3Y +60, $1.5B 6Y +75, $2.25B 10Y +85)
- 01/06 $Benchmark Societe Generale 4.25NC3.25 +150a, 4.25NC3.25 SOFR, 8.25NC7.25 +190a
- 01/06 $Benchmark National Australia Bank (NAB) 5Y +75a, 5Y SOFR, 11NC10 +150a
- 01/06 $Benchmark Hyundai Cap Am 3Y +100a, 3Y SOFR, 5Y +120a
- 01/06 $Benchmark India Export-Import Bank 10Y +130a
- 01/06 $Benchmark MUFG 6NC5 +100a, 11NC10 +115
- 01/06 $500M DBJ WNG 10Y SOFR+78a
- 01/06 $Benchmark Kexim investor calls
- $1B Priced last Friday, $15.6B total for the week
FOREX: USDJPY Falls into Negative Territory on Session
Jan-06 12:27
- With US yields edging lower alongside the broader negative reaction for ‘Trump trades’ following the WaPo report, USDJPY has fully reversed the prior session rally. Spot traded back below 157.00, and briefly extended its selloff to around 110 pips.
- Plenty of room on the downside should pressure on the greenback persist, with support for USDJPY not seen until 155.89, the 20-day EMA.
- As a reminder, Governor Kazuo Ueda said the BOJ will raise its benchmark interest rate to adjust the degree of easy policy if the improvement in the economy and prices continues, Nikkei reported Monday. Ueda said that the timing of policy adjustments will depend on future economic, price and financial conditions and the BOJ must pay attention to various risk factors.
- US Final Services PMI, Durable Goods and Factory Orders are all due for release today, and FOMC Member Cook will speak at the Conference on Law & Macroeconomics.
CANADA: USDCAD Eyes Sub 1.43 For Largest Daily Decline Since May 2023
Jan-06 12:21
- USDCAD has seen two pronounced moves lower overnight, first on local news wire headlines that PM Trudeau may resign this week ahead of a caucus meeting on Wednesday and then the aforementioned WaPo story on more targeted Trump tariffs.
- It sees the pair at 1.4310 (-0.9%) off a low of 1.4300, having last been below 1.43 on Dec 17, currently set for its largest one-day decline since May 2023.
- It has breached support at 1.4336 (Dec 20 low) and 1.4320 (20-day EMA), opening 1.4232 (Dec 17 low) in a test of what had looked like a bullish continuation signal.
- CAD had been outperforming but the broader USD weakness following the Trump headlines has seen it fall behind Antipodeans and EUR for top spot on the day.
- BoC-dated OIS has 19.5bp of cuts priced for the Jan 29 BoC decision. Today sees serv/comp PMIs for December headline the local docket but the main domestic release likely to alter BoC pricing isn’t until Friday’s jobs report.
