SOUTH KOREA: Korea Bond Wrap: Export Declines Again a Worrying Trend.
Nov-01 05:11
- Korean exports grew by +4.6% in October, a significant drop from the month prior (source: MNI – Market News).
- Korean PMI in contraction territory at +48.3 for the third successive month (source: MNI – Market News).
- KOSPI down marginally in low volume trading today whilst bond yields were lower.
2yr 2.978% (-1bp) 5yr 3.006% (-1bp) 10yr 3.085% (-2.5bp) 30yr 2.919% (-2bp)
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EURUSD TECHS: Corrective Pullback
Oct-02 05:10
- RES 4: 1.1342 2.00 proj of the Jun 26 - Jul 17 - Aug 1 price swing
- RES 3: 1.1276 High Jul 18 2023
- RES 2: 1.1214/34 High Sep 25 / 1.618 proj Jun 26-Jul 17-Aug 1 swing
- RES 1: 1.1144 High Oct 1
- PRICE: 1.1060 @ 06:09 BST Oct 2
- SUP 1: 1.1045 50-day EMA
- SUP 2: 1.1002 Low Sep 11
- SUP 3: 1.0940 61.8% retracement of the Aug 1 - 26 bull leg
- SUP 4: 1.0878 76.4% retracement of the Aug 1 - 26 bull leg
The short-term outlook in EURUSD remains bullish, however, this week’s move lower highlights scope for a deeper corrective pullback and the pair is trading closer to its latest lows. Attention is on support at the 50-day EMA, at 1.1045. A clear break of this average would signal scope for a deeper retracement towards 1.1002, the Sep 11 low. For bulls, a resumption of gains would refocus sights on 1.1234, a Fibonacci projection.
JGBS: Richer, BoJ Noguchi Speech & 10Y Supply Tomorrow
Oct-02 05:08
JGB futures are stronger but off session highs, +22 compared to settlement levels.
- Outside of the previously outlined monetary base, the market has had comments from Japan's new PM and his LDP team to digest.
- "I don't believe that we have completely overcome deflation at this point, and I still cannot deny the possibility of falling back" into deflation, Ryosei Akazawa, the minister in charge of economic revitalization, said at a news conference. (per BBG)
- Cash US tsys are slightly cheaper in today’s Asia-Pac session after yesterday’s haven-induced rally. The US calendar will see MBA Mortgage Applications and ADP Employment Change data later today. Nevertheless, the market will remain on Middle East headlines watch.
- Cash JGBs are richer across benchmarks beyond the 1-year, with yields 1-3bps lower. The benchmark 10-year yield is 2.6bps lower at 0.830% versus the cycle high of 1.108%.
- The swap curve has twist-steepened, pivoting at the 10-year, with yields 1bp lower to 4bps higher. Swap spreads are wider.
- The local calendar will see Jibun Bank Composite & Services PMIs tomorrow alongside 10-year supply. BoJ Board Noguchi will also give a speech in Nagasaki.
US TSYS: Tsys Futures Trade In Tight Ranges Ahead Of Jobs Data
Oct-02 05:06
- Tsys futures have traded in very tight ranges today TU is + 00⅞ at 104-06⅝, while TY is +02+ at 114-24+, there has been a small move higher over the past 30 minutes and we now trades near session highs.
- Headlines has been light today, with little coming out of the Vice Presidential debate. Looking at APAC markets, the focus again has all been on Hong Kong listed Chinese equities, with the BBG China Property Gauge surging over 30% on huge volumes.
- Cash tsys curve has done nothing today with yields all trading wrapped around unchanged for the session. The 2yr at 3.604% just off recent lows of 3.54%, while the 10yr is trading at 3.733%.
- Traders are reducing their bets on a further rally in US Treasuries, scaling back expectations of a half-point rate cut by the Fed in November. This unwind is ahead of the September jobs report out on Friday and follows comments from Powell suggesting a gradual approach to rate cuts.
- Projected rate cut pricing into year end gaining some momentum vs. this morning's levels (*): Nov'24 cumulative -34.9bp (-35.4bp), Dec'24 -70.8bp (-68.9bp), Jan'25 -102.3bp (-102.1bp).
- Focus will turn to MBA Mortgage Applications & ADP Employment Change later today
