Daily Market Outlook, December 10, 2021

Daily Market Outlook, December 10, 2021 Overnight Headlines BoJ Seen Holding Off Decision On Tweaking Covid Aid: Survey China Shipping To Southeast Asia Sees Prices Surge Tenfold New Zealand Manufacturing Activity Dips In Month Of November Biden Administration Signals Friday's Inflation Data Could Be High U.S. Eyes ‘Powerful’ Asia Economic Deal In 2022, Raimondo Says United States Senate Passes Bill Easing Way For Debt Limit Increase Bank Of Canada To Leave Inflation Target Unchanged After Review Major Sovereign Bond Yields To Rise Amid Heightened Volatility - Poll Dollar Firms Ahead Of U.S. Inflation Data; PBoC Clips Yuan's Wings China Paper Sees Yuan Rally Slowing After FX Reserve Ratio Hike Oil Prices Slip On Profit-Taking, But Head For Strong Weekly Gain Saudi Aramco To Supply Full Oil Volumes To Several Asian Buyers Asia Stocks Fall On Renewed Concerns Over Evergrande&Omicron Global Economy To Face Stagnation Risks In 2022, Nomura Says Morgan Stanley Sees Fed Hiking Rates Five Times Through 2023 The Day Ahead Asian equity markets are down this morning as risk sentiment turns more cautious. Reports suggest that China’s key annual conference for officials to discuss the economy will be primarily focused on supporting economic growth. That contrasts to the situation in the US and some other countries where the focus is increasingly turning to concerns about higher inflation. A vote on the latest Covid restrictions will be held in the House of Commons on Tuesday. Reports suggest that many Conservative MPs may either abstain or vote against the measures, possibly causing the government to rely on opposition support. Just released UK GDP data showed a lower-than-expected monthly rise of just 0.1% for October. That belies indications from business surveys that growth had picked up heading into Q4. Services output grew by 0.4% on the month but industrial production fell by 0.6% and construction output by 1.8%, possibly reflecting the ongoing impact of supply constraints. The data will probably lead to some downgrade of Q4 GDP expectations and possibly also for Q1 given the recent evidence of the new Covid variant, which has prompted a tightening in some restrictions. Also of interest in the UK today will be the latest Bank of England inflation attitudes survey. The BoE’s forecast that inflation will fall sharply through the second half of next year (after peaking in Q2) is partly predicated on inflation expectations remaining low and so this survey will be watched for whether expectations of future price rises remain well anchored. In the US, for today’s November CPI report look for a rise from 6.2%y/y in October to 6.7%, which would make it the highest since 1982. Meanwhile, core inflation, excluding food and energy, is expected to rise from 4.6% to 4.8%. Also of interest will be how widespread the rise in prices. For most of this year, the bulk of the increase in inflation has been from commodity prices and goods affected by supply chain disruptions. However, last month’s report indicated that price rises may be broadening to services, adding pressure on policymakers to rein back monetary support. The December University of Michigan consumer sentiment survey will provide evidence on US households’ reaction to the latest news including the ongoing rise in inflation and Omicron. Sentiment slipped sharply last month to its lowest level in more than a decade reflecting rising concerns about both current conditions and the future. The survey also includes questions about inflation expectations. Unsurprisingly short-term expectations have moved up sharply this year, but longer-term expectations have been more stable. The Federal Reserve is likely to be particularly interested in whether that is still the case in December.G10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby (P) Puts (C) Calls )EUR/USD: 1.1250 (1.0BLN), 1.1290-1.1300 (820M), 1.1320-25 (680M)1.13-50-60 (530M), 1.1375-85 (1.75BLN)USD/JPY: 112.50-55 (302M), 113.10-20 (1.2BLN), 113.50-60 (555M)113.95-00 (780M), 114.25 (1.145BLN)USD/CHF: 0.9140-45 (380M), 0.9250 (400M), 0.9340-50 (340M)GBP/USD: 1.3200 (860M), 1.3225 (229M), 1.3250 (588M), 1.3300 (263M)EUR/GBP: 0.8540 (200M). NZD/USD: 0.6925 (251M)AUD/USD: 0.6900 (1BLN), 0.7000 (580M), 0.7100-05 (880M), 0.7115 (412M)0.7185 (306M)AUD/NZD: 1.0275 (330M), 1.0375 (400M), 1.0400 (330M). AUD/JPY: 78.10 (250M)USD/CAD: 1.2615 (320M), 1.2740-45 (650M), 1.2800 (303M),1.2850 (714M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.15 Bullish above EUR/USD, EUR/JPY tad better bid in Asia after fall yesterday EUR/USD 1.2875-1.1302 EBS, low yesterday 1.1279, Wednesday 1.1267 Also recent lows of 1.1228 Tuesday and 1.1186 November 24 EUR/USD in 1.1291-1.1327 hourly Ichi cloud, 100/200-HMAs 1.1294/1.1305 Option expiries today include 1.1250 E1 bln, 1.1290-1.1300 E899 mln Also above 1.1320-25 total E678 mln, 1.1350-60 E531 mln Monday to see E1.9 bln alone at 1.1320 strike EUR/JPY 127.96 to 128.23 EBS, low yesterday 127.95, Dec 3 127.39 EUR/GBP still heavy though, 0.8538-43, EUR/CHF indicated 1.0431 Eyes on US CPI, Asia more risk off than on, most bourses off EUR/USD outlook is mixed, bears need a key level above to hold 14-day momentum is on course to see a positive reading at the end of Friday That would be the 1st time since Nov 3, would highlight an upward shift Last week's 1.1387 peak should act as a barometer for direction Where dollar ends the week could compound its fragilityGBPUSD Bias: Bearish below 1.36 Bullish above. Cable eyes 1.3215 (Asian session low) after UK Oct GDP comes in below f/c Up 0.1% vs +0.4% f/c 1.3231 was Asian session top 1.3200, 1.3173 (Thursday's low) and 1.3162 are support points below 1.3215 There is a large 1.3200 option expiry for the 10am ET NY cut 1.3162 was Wednesday's one-year low, on word of new UK restrictions vs COVID +0.05% towards the top of a 1.3215-1.3231 range with only occasional flow Cable often trades tight Asian range on Friday ahead of data - U.S CPI today Charts; 5, 10 & 21 day moving averages fall, 21 day Bollinger bands expand Bearish setup targets a break of 1.3166, 38.2% of the 2020-2021 rise 1.3160 break targets 1.2830/50, Nov 2020 range support and 50% 2020-21 rise Close above 1.3334 falling 21 day moving average needed to end downtrend Asian 1.3215 low and 1.3257 10 DMA are initial support and resistanceUSDJPY Bias: Bullish above 112.50 Bearish below USD/JPY in stasis ahead of US CPI, JPY crosses too USD/JPY 113.34-57 EBS in Asia, inside day, yesterday 113.27-82 Markets on hold ahead of key US CPI data, +0.7% m/m, +6.8% y/y eyed US yields on hold too well above last Friday lows, Tsy 10s @1.498% Plenty option expiries in area today, to help contain action 113.00-20 total $1 bln, 113.30-60 $989 mln, 113.95-114.00 $780 mln Tokyo risk more off, end-of-week adjustments, Nikkei -0.5% @28,573 EUR/JPY 127.96-128.29 EBS, GBP/JPY 149.73-150.26, AUD/JPY 80.80-81.33 AUD/JPY best bid of lot, tracking away from 80.64 low WednesdayAUDUSD Bias: Bearish below 0.7250 Bullish above Shakes off early losses as risk appetite steadies +0.15% at the top of a 0.7132-0.7158 range - only occasional interest Low key markets pre U.S CPI, E-mini S&P +0.15%, Brent and UST yields steady Charts; daily momentum studies rise, 21 day Bollinger bands contract 5, 10 & 21 day moving averages conflict - neutral setup, but downtrend holds Wednesday's 10 DMA break, now 0.7112, suggests downtrend set to consolidate Sustained 0.7182 21 DMA & 0.7208, 38.2% Oct-Dec fall break would be bullish Close below 0.7111 10 DMA would bring the downtrend back into play Sydney 0.7132 low and 0.7182 21 DMA initial support and resistance

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-december-10-2021"
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Two very fine Bordeaux blends

If you’re looking to keep the cash under control while drinking world-class wines this month, then look no further than these fine Bordeaux blends.

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Three of the best Christmas markets

Lovers of festive German markets will have to find them on these shores this year. Chris Carter reports.

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Scottish Mortgage investment trust update: healthcare gains offset Chinese stock woes

Positions in Chinese tech stocks weighed on performance at Scottish Mortgage int he year to 30 September, but healthcare stocks administered first aid. Saloni Sardana looks at how the trust is doing.

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Market Spotlight: GBPJPY Threatens To Break Lower

GBJPY Sitting On Major Support LevelThe recent sell off in GBJPY has seen the market collapsing from the October highs around 157.88 to current lows around 149.39. Price is now sitting on a major band of support between the 148.49 level and the 149.39 level, as well as the retest of the broken bear channel. GBP sentiment has shifted sharply in recent weeks following the BOE’s lacklustre November meeting and the developments with Omicron since then (including fresh restrictions) as well as more political scandals for the government. With the retail market around 70% long the pair, there is room for the current sell off to deepen. On a break of the 148.49 lows bears can target a move down to 146.00 initially and 144.80 thereafter.Keep An Eye OnThe BOE meeting next week will be the main data focus (along with UK CPI ahead of the event). Should the BOE hold off on a rate hike, in light of the uncertainty around Omicron and the government’s fresh restrictions, this is likely to be reflected in a lower GBP. On the other hand, if the BOE surprises and pushes ahead with a rate hike, or if guidance is firmly bullish, this might help lift GBP in the near term.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-gbpjpy-threatens-to-break-lower"
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What tightening Covid rules mean for your money

The government has introduced new rules to slow the spread of Covid. John Stepek looks at what they could mean for the markets, interest rates, and your money.

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The Crude Chronicles - Episode 116

Oil Traders Cut LongsThe latest CFTC COT institutional positioning report shows that oil traders reduced their net long positions further last week. Upside bets in oil have now been steadily reduced for a number of weeks reflecting the recent blow to risk appetite suffered as a result of news of the Omicron variant. This week, however, oil has ben in better demand with prices recovering off lows around mid 65s to trade back up into the low 70s.Risk Sentiment ReboundsThe rebound in oil prices this week has been a function of the general recovery in risk sentiment seen across the markets. The initial knee-jerk reaction to the Omicron news, which saw risk assets heavily sold, has dissipated for now. While the new variant appears to be more transmissible, for now at least, it also appears to be far milder in terms of symptoms. Consequently, the market is attaching a much lower risk of a return to lockdowns or widespread travel restrictions. With this in mind, risk appetite looks likely to continue to recover unless this narrative changes as a result of a shift in Omicron data.OPEC Lifts Oil ProductionIndeed, the rally in oil prices this week comes despite OPEC+ agreeing to lift oil output by 500k barrels-per-day this month, an increase on the 400k barrels-per-day quota set in January. The decision was taken, despite the uncertainty around Omicron and the recent price drops, as a means of boosting overall oil production given that some members of the group have struggled to meet quotas. The group is next due to meet on January 4th to decide oil quotas for the initial months of 2022.EIA Reports Lower Drawdown Than ExpectedThe latest report from the Energy Information Administration this week was unable to dent bullishness in oil prices despite a mostly bearish set of figures. The EIA reported that commercial US crude stores fell by only 0.25 million barrels last week, far less than the 1.7 million barrel decline forecast. Meanwhile, gasoline inventories were seen higher over the week, rising by 3.9 million barrels, far above the 1.8 million barrel increase forecast. Distillate stockpiles were also higher, rising by 2.7 million barrel, again higher than the 1.6 million barrel increase forecast.Technical ViewsCrude OilFollowing the bounce off the 65.52 level support, oil prices are now fighting to get back above the broken bullish trend line. With the 74.46 level resistance above, this is a key resistance band for oil. A rejection in this area raises risks of a large head and shoulder pattern forming, pointing to risks of a deeper reversal in the medium term.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/the-crude-chronicles-episode-116"
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Investment Bank Outlook 09-12-2021

CitiEuropean OpenThe morning saw some headlines from Bloomberg stating that Omicron is four times more transmissible than Delta according to a Japan study. This followed yesterday’s news from Pfizer and BioNTech that we covered. Shrugging the news off, however, markets remained sleepy, with G10 seeing no notable moves and USD ticking higher slightly. Over in Asia, CNH saw the PPI-CPI gap start to narrow today, and traded up 0.1% on the day.On the data front, we will see Jobless & Continuing Claims (13:30 GMT) for USD and Germany CA Balance (07:00 GMT) for EUR. The EM region will welcome a series of rate decisions, starting with HUF (08:30 GMT) where the market expects a 20bps hike to 3.30. This is followed by a UAH decision (12:00 GMT) where the market expects 50bps hike to 9.00%, and PEN decision (23:00 GMT), where Citi Economics expect a 50bp hike to 2.50%. We also note that MXN CPI (12:00 GMT) will be sighted.A lens on the USUSD ticked slightly higher on the day at +0.12%. UST were mostly flat, although they firmed up slightly, seeing yields drop by 1-2bps across the tenors.Our UST trader Hideyuki Liu noted treasuries opened this morning trading softer, perhaps taking its cues from weakness also in Aussie rates (or vice versa), as the curve bear flattened on underperformance in the front-end. Desk flows were skewed to buying in 10y and 30y. Around noon, eMinis came off suddenly, with no obvious catalyst though some cited a Japan study of the Omnicron variant that we mentioned in the earlier section. As the London open approached, desk has now seen good buying in the front-end by RM.G10 In FocusCAD saw a muted market reaction to the BoC rate decision yesterday, which held policy rate and the forward guidance. The Bank acknowledged the Omicron variant as a source for renewed uncertainty while also highlighting the persistent supply bottlenecks as inhibiting growth.EUR traded 0.1% in the red, and will see Germany Current Account Balance at 07:00 GMT for October. Citi Economics expects a below consensus print at -0.3%MoM vs 0.8%MoM market e. and -0.7%MoM p., sighting supply shortages as the culprit behind the figure.Key Points To Consider–Chinese CPI came in slightly under expectations, printing 2.3% vs 2.5% consensus, while PPI printed at 12.9%, vs 12.1% consensus. We note that the CPI print is the highest since Aug 2020. The PPI moderated, however, responding to government efforts to tame rising energy prices.As we noted in FX tail risk hedges reduced, Aussie, Kiwi bond curves steepened earlier in the day, though most G-10 pairs were close to flat. After Wednesday’s risk-on session, our spot desk trader John Nihill in Singapore notes that we have seen tail risk hedges being reduced and a general bias to reduce risk. We note that AUDJPY 1m ATM volatility – one of the most liquid bellwethers of FX risk sentiment in options – is still proving stubborn, little changed so far after Wednesday’s slide.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investment-bank-outlook-09-12-2021"
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Market Update – December 9 – Imminent inflation data puts the rate outlook back in focus!

• USD down (USDIndex at 95.80) as Omicron worries ebbed further after reports that 3 jabs of the Pfizer vaccine are offering good protection against the variant, with global stock markets sustaining its weekly gains but  traded mixed, witf USA30 and USA100 unchanged most of the session.
• The BoE is increasingly seen to push back a planned rate hike into next year, which is adding to pressure on the pound.
• The JOLTS report showed a bounce in openings to another 11 mln level, but a decline in quits.
• The Bank of Canada left policy on hold, as expected.
• A business outlook indicator for Japan came in much stronger than anticipated, but Topix and JPN225 still dropped -0.6% and -0.5% respectively.
• US debt limit drama averted as Senate leadership makes a deal (expected at $2 trl increase) – The Senate could take it up perhaps today, with the House voting on Friday, allowing possible enactment just before Christmas.
• US Yields 10-year rate remains above the 1.5% mark though as confidence in the global recovery continues to strengthen, with most expecting the latest virus variant to provide only a temporary set-back for the world recovery and as and ongoing Fed tightening worries continued to unwind safe haven trades since Thanksgiving.
• China PPI inflation drops back from 26-year high. – creates room for further stimulus measures.
• USOil – rosed to $73.12.
• Gold: at $1780 area as there are limited gains  on levated Treasury yields and caution in the run-up to a key US inflation data and Federal Reserve policy meeting, which capped gains of the non-yielding asset.
• FX markets – AUD and NZD were sought as local yields moved higher. Sterling stabilised, after selling off yesterday and Cable is currently at 1.3213. EURUSD corrected overnight, but is still firmly above the 1.13 mark at currently 1.1331. USDJPY at 113.50.

European Open – The March 10-year Bund future has lifted 16 ticks to 173.65, outperforming versus Treasury futures, which are little changed, although in cash markets the US 10-year rate has also corrected from yesterday’s highs.  GER30 and UK100 futures are up 0.1%, after being pressured by a jump in yields yesterday, as ECB officials signalled that omicron won’t derail plans to phase out PEPP in time next year.

Today – In US, Jobless claims are on tap. In Switzerland SECO will release its latest set of forecasts ahead of next week’s SNB decision.

Biggest FX Mover @ (07:30 GMT) EURJPY (-0.36%) Currently MAs are aligned lower as the asset turned below PP. MACD signal line & histogram are slipping,  RSI is at 41 and  Stochastic declined to 12. H1 ATR 0.127, Daily 0.908.

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Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Dollar on Back Foot as Omicron Optimism Grows

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Daily Market Outlook, December 9, 2021

Daily Market Outlook, December 9, 2021 Overnight Headlines Brazil's Cen Bank Sees Rates Above 10% In Feb After Hawkish Hike RBA's Harper: Economy Can Run Strongly Without High Inflation RBNZ Warned Of Stress For Home Buyers As Rates Rise - NBR Volatility Surges In Australia’s Bond Market With QE In Question Libor Fix Wins House Support in Drive to Avert Transition Chaos China Lifts Midpoint To 3-1/2-Year High, But Weaker Than Forecast Oil Extends Omicron Relief Rally With Demand Concerns Easing Citi Lowers 2022 Brent Forecast By $2 To $69/Bbl On Omicron Fear Australia's Cen Bank Sceptical On Digital A$, But That Could Change Asia Markets Follow Wall Street With Opening Gains, Nikkei Slips Strategists’ 2022 Forecasts Diverge By Second-Most In 10 Years Kaisa Moves Closer to Discussing Financing With Bondholders Japanese Investors Snap Up Most Foreign Stocks On Record The Day Ahead Asian equity markets were mixed, with bourses in China outperforming, supported by policy stimulus measures. China’s factory inflation slowed from last month’s 26-year high to 12.9%, although it was a smaller decline than forecast, while CPI inflation remained low. Japan’s Nikkei, however, traded lower. Markets continue to assess the impact of the omicron variant on health and economic outcomes. There are again limited economic data and events in the calendar today, as the focus remains on the omicron variant. Although there is some cautious optimism that the health impact of the new variant may not be more severe than delta, the UK government has nevertheless announced further restrictions in England in a bid to stem its transmission. PM Johnson imposed ‘Plan B’ measures, including face masks in more public places from Friday and, from next week, working from home (Monday) and vaccine passports (Wednesday). The measures are expected to be voted on by Parliament next week. Other parts of the UK already have stricter measures. In the US, this afternoon’s weekly initial jobless claims data are expected to show them remaining around pre-pandemic levels, an indication of a strong labour market. Tomorrow’s US CPI inflation report is also expected to show a jump up close to 7%. The Fed is expected to announce a quicker pace of tapering next week, paving the way for the option to raise interest rates in the first half of next year. Official UK GDP figures for October will be released at 7am tomorrow, but they are likely to be seen as old news. Evidence from the PMI survey points to a pickup in momentum at the start of Q4, with the composite index (covering manufacturing and services) rising to 57.8 in October from 54.9 in September. Look for a solid rise in October GDP of 0.7%, supported by broad-based sector increases. Indications suggest that the pace of expansion remained firm in November, but the new variant could moderate growth in December. Overall, the BoE’s Q4 GDP forecast of about 1% appears to be appropriate. German CPI inflation figures, also due early tomorrow, are expected to confirm the preliminary reading of a sharp jump up to 6.0% in November (on the EU-harmonised measure). High inflation in the Eurozone is also leading policymakers at the European Central Bank to consider the degree to which monetary support (asset purchases in the first instance) should be scaled back. Markets are expected to remain volatile amid omicron uncertainties and as central banks prepare to rein back support. The BoE, however, is increasingly expected to defer a near-term rate rise until the New Year, as GBP/USD trends lower, holding just above 1.32. The US 10-year Treasury yield edged down to 1.50%, while oil prices were mixed. Brent crude price edged above $76 a barrel. G10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby (P) Puts (C) Calls )EUR/USD: 1.1300 (450M), 1.1380 (567M), 1.1400 (359M)GBP/USD: 1.3200 (370M), 1.3300 (261M)EUR/GBP: 0.8550-60 (744M), 0.8600 (250M)USD/JPY: 112.90-113.00 (1.1BLN), 113.10-15 (1BLN), 113.25 (1BLN)113.50 (868M), 113.70 (1BLN), 113.90-114.00 (1.1BLN), 114.10 (2.2BLN)Technical & Trade ViewsEURUSD Bias: Bearish below 1.15 Bullish above EUR soft in Asia, some pull-back after gains yesterday, buy-backs over? EUR/USD 1.1348 to 1.1331 EBS, high yesterday 1.1355 Market likely capped for now ahead of 1.1400, 1.1387 spike high Nov 30 Support eyed from ahead of 1.1300, good on 1.12 handle Nearby option expiries today - 1.1300-25 E621 mln, 1.1350-1.1410 E1.7 bln EUR/JPY also sags some from 129.11 high yesterday, Asia 128.88-129.03 EBS EUR/GBP off a bit too from 0.8598 high yesterday, Asia 0.8584-90, quiet Large nearby option expiries - 0.8475-80 E539 mln, 0.8550-60 E746 mln EUR/CHF 1.0437-42 in Asia after push up to 1.0455 yesterday EUR/USD outlook is mixed, bears need key resistance to hold Fourteen-day momentum has remained negative since early November However, Wednesday's gain breached the December 2 1.1347 high = bullish Last week's 1.1387 peak should act as a barometer for direction A clean and sustained break above 1.1387 will signal a bullish revival Dollar could be in for another rough DecemberGBPUSD Bias: Bearish below 1.36 Bullish above. -0.1% trades at the base of a 1.3193-1.3210 range with moderate interest Economists split on Dec rate rise, no change narrow favourite Starting pay up by a record, as candidate shortages squeeze Charts; 5, 10 & 21 day moving averages fall, 21 day Bollinger bands expand Close above 1.3339 falling 21 day moving average needed to end downtrend Bearish setup targets a break of 1.3166, 38.2% of the 2020-2021 rise 1.3160 break targets 1.2830/50, Nov 2020 range support and 50% 2020-21 rise Bear bias holding but disappointing follow through after key Fibo breach Next retrace level off the 1.1413-1.4250 climb is at 1.2832, 50% Negative 14-day momentum holds but RSI still bumping along in o/s territory Topside and the 10DMA, 1.3266, continues to define the trend Break here could trigger a larger squeeze back above 1.3300USDJPY Bias: Bullish above 112.50 Bearish below USD/JPY consolidates, heavy pre – 114, some crosses soft USD/JPY steady between 113.64-82 EBS in Asia, high yesterday 113.95 Market still seen heavy from ahead of 114.00 - Japanese exporters, specs Downside limited however, bids likely raised, from @113.50, trail down Massive option expiries nearby today, 113.00-35 total $2.6 bln 113.50 $868 mln, 113.70 $1 bln, 113.80-95 another $1 bln, 114.00 $579 mln Gravitational pull exerted by 113.70-95 strikes Higher yields supportive, Tsy 5s 1.277%, 7s @1.457%, 10s @1.521% Tokyo not so risk on, Nikkei par on day @28,866, E-Minis too @4704 JPY crosses steady to soft, AUD/JPY 81.39-56, GBP/JPY 149.98-150.30 EUR/JPY on soft side, 129.03 to 128.85 Dollar's chance of climbing against Japanese yen grows Thick daily cloud, that spans the 111.90-113.31 region, underpins That increases scope for further gains to challenge kijun line at 114.03 A break and daily close above will accelerate further up to the 114.38 Fibo 114.38 Fibo is a 61.8% retrace of the 115.52 to 112.54 November dropAUDUSD Bias: Bearish below 0.7250 Bullish above Soft with the firmer USD, but risk resilient -0.05% inside day with a tight 0.7158-0.7173 range, busy early then quiet Low key Asian FX, oil up, Brent +1%, stocks mostly firmer, UST yields steady Digital AUD led by demand - cautious on crypto-assets - RBA... Charts; 10 & 21 daily and weekly moving averages continue to trend lower Daily momentum studies base, 21 day Bollinger bands contract - neutral setup Break of 0.7109 10 DMA suggests downtrend will enter a consolidation phase Sustained 0.7189 21 DMA and 0.7208, 38.2% Oct-Dec fall would be bullish Close below 0.7109 10 DMA would reinvigorate the downtrend

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-december-9-2021"
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Digital euro, Swiss franc trials were successful, c.banks say

from Forex News https://www.investing.com/news/economy/digital-euro-swiss-franc-trials-were-successful-cbanks-say-2704601
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GBPUSD – UK imposes new restrictions and BoE may slow interest rate hikes

GBPUSD, H4

Pound sterling fell yesterday to a new yearly low of 1.3160 after Prime Minister Boris Johnson enacted a “Plan B” that includes advice to work from home and the use vaccination certificates for large-volume events. The announcement comes after the number of reported cases of Covid-19 this week rose to the highest since January, with 568 cases of the Omicron variant reported in the UK so far already. The resurgence of the virus ahead the December 16 meeting of the Bank of England (BoE) means there is a high possibility that the central bank will keep interest rates on hold. BoE policymaker Michael Saunders, who voted to raise interest rates at last month’s meeting, said on Friday he would like to wait for more information on the impact of the omicron strain before deciding to vote at next week’s meeting.

The Pound’s depreciation coincided with 10-year British gilt yields that hit their lowest point since early September at below 0.7% (now at 0.76% ) as the BoE may delay further interest rate hikes.

From the central banks’ point of view, the Fed could be moving more importantly and faster at next week’s meeting. According to Fed Chair Powell, he has signaled to consider reducing QE and raising interest rates sooner than expected. That means pound sterling may continue to be pressured.

However, from a technical point of view, we are beginning to see a trend reversal of a falling wedge pattern on the key support 1.3200 (Fibo 161.8 zone), where if the price breaks above the upper band line and rises above the MA50, this could be a confirmation of the falling wedge pattern and the price may turn into a short-term uptrend. The next target is 1.3370. While the short-term outlook is bearish, the MACD is still moving below the 0 line as well as the RSI moving below the 50 level at the 40 level if the price breaks down 1.3200. Again, there will be the next support at the same low at 1.3160.

Click here to access our Economic Calendar

Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Midweek Market Podcast – December 8

Markets continue to be roiled by the Omicron news flow, as a positive tilt lifted Equities, USD and Yields. Still to come before the week closes out are the BOC, the 30-yr auction and the key US CPI.

HotForex · Midweek Market Podcast – December 8

 

The Market Week – December Week 2    

Another volatile week as the Omicron news peaks and troughs, and markets respond accordingly. Stocks recovered, the Dollar and Yields cooled and rallied. The NFP headline missed significantly but the details were positive. OPEC+ surprised and central banks held steady ahead of the US CPI data on Friday.

Jobs grabbed the headlines; new jobs for November were only 210,000 compared to expectations of 555,000, however Unemployment fell to 4.2% and earnings held close to 5%. The weekly US unemployment claims posted a new 52-year low of 194,000, and this week 219,000 is expected. The data continues to trend lower and to demonstrate a tight US labour market.

The vaccine and booster rollout programmes were given a major profile lift as the Omicron variant appears more transmissible but perhaps less deadly, however it will take several weeks before this can be confirmed. Countries closed borders and restrictions were re-imposed as uncertainty (the markets’ biggest enemy) continued to grip sentiment.

Volatility was evident everywhere. In FX the USDIndex rallied from 95.50 lows to 96.50 and holds over 96.00. EURUSD sank from 1.1360 to 1.1225, before reclaiming 1.1300, USDJPY consolidated at 112.70 and trades today in the mid-113.00s. Cable sank below  1.3200, to new 1-year lows at 1.3160, as political turmoil rumbled in London.

US stock markets saw a decisive boost this week amid improved growth optimism and growing conviction that Omicron won’t derail the global recovery. The USA500 leads the way, advancing to around 4,700, reversing November’s plummet. December’s Santa Claus rally traditionally makes it a positive month for equities. Could it be disturbed by the Fed next week?

The Gold price, having reversed the month’s losses to $1761 lows as the Dollar and yields ease, remains sideways, with the safe haven bid expected to be limited. The 200-day exponential moving average is north of the key $1800 handle.

USOil prices had a particularly beneficial week, taking a breath as concerns eased further about the impact on global fuel demand of the Omicron variant. Currently it has steadied at $71.00, as geopolitics are now in focus, with US-Iran nuclear talks to resume later this week; US-Russia tension was raised as Biden warns Putin of sanctions, and Nord Stream 2 disruption if Russia invades. The November 29 high of $72.93 is a key resistance for USOIL.

The yield on the US 10-Year Treasury Note had its biggest weekly drop since June 2020 last week due to a hawkish Powell and fears over Omicron. This week it was a touch lower at 1.4597%, a  clear bear flattening of the yield continues to weigh on Treasuries ahead of US Inflation on Friday and the Fed meeting next week.

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Stuart Cowell  

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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