SECURITY: Vance, VdL, Wang & Zelenskyy To Address MSC
Feb-14 12:39
A correction to the earlier bullet ('SECURITY: Ukraine Discussions Top Of Agenda For MSC', 0911GMT) ...
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FOREX: USDCHF Extends Pullback, BofA Recommend Buying 3m Call Spread
Jan-15 12:39
- USDCHF is down a moderate 0.1% on the session, however the pullback from the 0.9201 cycle highs has now extended to roughly 1% amid the broader softening of the greenback from the Monday highs. It is worth noting that USDCHF came within close proximity of the key medium-term resistance area at 0.9224/44. Support is seen at 0.9063, the 20-day EMA.
- We noted earlier that BofA have recommended buying a 3m 0.92/0.9450 USDCHF call spread, citing "trade uncertainty, strong growth and policy divergence" behind a stronger Dollar, alongside bullish technical conditions and a forward discount / carry factors supporting the position.
- For upside levels, BofA identify 0.9240, 0.9455 (Fibonacci retracement), 0.9720, and potentially parity, while the main risk they highlight is the dollar losing the "broad-based bullish momentum" in Q1'25. They believe if their "core view of a stronger USD at the onset of 2025 turns out to be right, USDCHF would likely have the least number of reasons to reverse its short-term uptrend."
- A reminder that Danske highlighted that recent CFTC data indicates positioning is pronouncedly long, underlining that market bets continue to look for further USDCHF upside.
US DATA: Mortgage Applications Jump Despite Rates At Highs Since May
Jan-15 12:18
- MBA composite mortgage applications jumped 33% (sa) last week, in the first full week for the year, after a four-week cumulative decline of 25% primarily seen in the last two weeks of December.
- Refis jumped 44% on the week vs -36% over that same four-week period, whilst new purchase applications jumped 27% after a cumulative -18%.
- It’s a strong start to the year but seasonal adjustment can be difficult around the festive period and it’s worth remembering that composite applications are still only 48% of 2019 averages (purchases 63%, refis 33%).
- It comes despite the 30Y conforming rate increasing another 10bps to 7.09% for its highest since May 2024, up from a recent low of 6.19% in late September.
- In a further sign of some relative easing in lending standards, the regular to jumbo spread pushed higher again last week, with the regular rate (7.09%) pushing above the jumbo rate (7.05%) for the first time since Nov 2023.
OUTLOOK: Price Signal Summary - Trend Structure In Bunds Remains Bearish
Jan-15 12:18
- In the FI space, the trend in Bund futures is unchanged, it remains bearish and Tuesday’s fresh cycle low reinforces this theme. The contract has cleared key support at 132.00, the Nov 6 low. The clear break of this level strengthens a bearish theme. Sights are on the 130.00 handle next. Key short-term resistance is at 132.78, the 20-day EMA. Gains would be considered corrective.
- The trend condition in Gilt futures is unchanged, the direction remains down and last week’s fresh cycle lows reinforce current conditions. Recent weakness also highlights an acceleration of the trend. Sights are on 88.87 next, a 2.764 projection of the Dec 20 -27 - Jan 2 price swing. Initial resistance is at 90.31, the Jan 9 high. Resistance at the 20-day EMA, is at 91.61. The EMA is seen as an important hurdle for bulls.
