LATAM FX: Price Signal Summary – USDCLP Bear Leg Extends
Feb-12 14:42
- USDMXN is in consolidation mode and continues to trade below the Feb 3 high. The trend structure remains bullish and the recent move above 20.9382, the Jan 17 high, marked a resumption of the uptrend. The move higher also highlights the possible end of a sideways trend that has been in place since early November 2024. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. The focus is on a climb towards 21.4007 and 21.5807, the 3.00 and 3.236 projections of the Sep 18 - Oct 1 - 4 ‘24 price swing. Key support has been defined at 20.1343, the Jan 24 low. A clear break of this level would highlight a potential reversal. This would open 19.7618, the Nov 7 ‘24 low.
- A corrective cycle in USDBRL remains in play and this signals scope for a continued retracement. The 50-day EMA has been breached and this has been followed by a break of 5.8675, the Dec 12 low. Sights are on 5.7231, the Nov 13 ‘24 low, and 5.6340, the Nov 7 low. On the upside, a reversal would refocus attention on 6.3165, the Dec 18 high and the bull trigger. Initial resistance is at 5.9225, the 50-day EMA.
- USDCLP remains in a bear-mode condition. The pair has recently breached the 50-day EMA. The clear break of the average highlights potential for a deeper retracement. Note too that the pair has also traded through 966.86, the Dec 6 low, and the 960.00 handle. This reinforces current bearish conditions and opens 940.35, the 61.8% retracement of the upleg between Sep 27 ‘24 - Jan 3. Initial firm resistance is seen at 982.47, the 50-day EMA.
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STIR: Around 45bp Of BoE Cuts Still Priced Through Year-End
Jan-13 14:37
Stabilisation away from session lows also evident in GBP STIRs as the day progresses, leaving 44bp of cuts priced through year-end and SONIA futures little changed to -4.5 on the day.
- UK headline flow limited since PM Starmer’s comments that underscored the government’s desire to stick to the fiscal rules and generate growth, while underscoring its willingness to make difficult spending decisions.
- We will hear from BoE’s Breeden again on Tuesday, but as is the case with most of her speeches, there is unlikely to be much on monpol.
- More focus will be placed on comments from dovish dissenter Taylor later in the week, as well as Wednesday’s CPI data.
EQUITIES: US Opening calls
Jan-13 14:25
US Cash open is set for a steady, stable start with futures mostly trading in a holding pattern for the past 2hours ahead of a very busy Week.
- Calls: SPX: 5,791.0 (-0.6%); DJIA: 41,917 (-0.1%/-22pts); NDX: 20,645.5 (-1.0%).
STIR: More SOFR Put Trade
Jan-13 14:14
Better put flow continues even as underlying futures pare losses. Note large Jun'25 strangle buyer:
- 5,000 SFRJ5 95.50/95.56 put spds ref 95.83
- +10,000 SFRM5 95.56/96.12 strangle, 12.00 ref 95.83
- -10,000 SFRU5 95.37/95.56 put spds vs 5,000 SFRM5 95.62/95.87 put spds, 5.75-6
- -15,000 SFRU5 95.18/95.43 put spds v SFRZ5 95.87/96.06 put spds, 7.5-7.25
- -4,000 SFRZ5 95.18 puts 0.5 over 96.12/96.62 call spds vs 95.88/0.38%
- +4,000 SFRZ5 95.25 puts, 13.5 vs. 95.88/0.25%
