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JGB TECHS

(Z1) Bearish Trend Condition

AUSSIE 10-YEAR TECHS

(Z1) Bearish Price Sequence

AUSSIE 3-YEAR TECHS

(Z1) Off Recent Highs

US 10YR FUTURE TECHS

(Z1)‌‌ Support Appears Exposed

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A temporary dovish shift from the central bank, possible tightening from the Fed and chance of falling copper prices are all factors contributing to an assessment by LarrainVial economists in a report.

  • If correct in their exchange rate prediction, the central bank would consider suspending its reserve replenishing and expansion program and stop buying dollars (currently at $40million per day).
  • Chilean institutions will face uncertainty surrounding the new constitution and possible changes to economic model.
  • "We think that institutional uncertainty will remain a fixture in the local political landscape, although the recently held primaries have somewhat allayed the market's worst fears".
  • BCCh has "plenty of reasons" to keep raising borrowing costs. They believe the bank will hike the key rate by 25bps at August meeting continuing to at least 4% by end of 2022.
  • Their outlook assumes an extension of fiscal stimulus until December, with the aim of avoiding a potential fourth pension fund withdrawal.