Sample Category Title

• 61% of pending orders in the 100-pip range are to BUY
• 56% of open positions are bullish (+3%)
• Notable support located circa 1.3300
• Upcoming events: CB Consumer Confidence and Pending Home Sales

The Sterling is continuing to trade against the Dollar in a symmetrical triangle pattern. Due to after-Christmas inactivity the pair is not expected to make a breakout today.

The UK current account deficit was at £-22.8B representing 4.5% of GDP in the third quarter. According to the market expectations, deficit is set to narrow as the depreciation of the British Pound would encourage exports. Data also showed that UK consumers endured another tough period in the quarter, as their spending rose at the weakest yearly pace since 2012. The ONS said that the UK GDP was confirmed at 0.4% on a quarterly basis, while expanding 1.7% year-over-year.

The only notable event of this post-holiday week will happen today at 15:00 GMT with release of information on American consumers' sentiment by the Conference Board Inc.

GBP/USD does not succeed to climb above 1.3400

Despite adoption of tax reform and release of various macroeconomic data, the British Pound is continuing to trade against the Dollar in a two-week long symmetrical triangle whose upper boundary simultaneously represents the slope of a larger falling wedge pattern. Because of an empty economic calendar as well lower liquidity the cable is expected to remain within the above patterns today. In the meantime, an allocation of pending orders suggests that traders are rather eager to acquire the Sterling, which is contrary to the generally bearish market sentiment. From daily chart perspective, it looks like the pair will make inch higher from the triangle due to support set up by the weekly and monthly PP located around the 1.3370 mark.

Hourly chart

On daily chart the cable is also trading in symmetrical triangle pattern. An allocation of the weekly and monthly PP suggests that the pair eventually might break to the north.

Daily chart

The Sterling stopped to decline against the US Dollar on Friday on some improvements in the British current account deficit. GBP/USD rebounded from a twice hit intraday low of 1.3365 to add 15 pips or 0.11% and continue rising with enough strength to reach 1.3395.

The UK current account deficit was at £-22.8B representing 4.5% of GDP in the third quarter. According to the market expectations, deficit is set to narrow as the depreciation of the British Pound would encourage exports. Data also showed that UK consumers endured another tough period in the quarter, as their spending rose at the weakest yearly pace since 2012. The ONS said that the UK GDP was confirmed at 0.4% on a quarterly basis, while expanding 1.7% year-over-year.

The Canadian Dollar strengthened against the US Dollar, an the report indication that the country's economy paused its growth in October. The USD/CAD rose 67 base points or 0.52% to enter the 1.2780 area, but got back gradually to the 1.2707 level.

The Canadian economic expansion stalled in October, reinforcing forecasts that the growth cooled in H2 of the year, while lowering expectations that the Bank of Canada would raise interest rates in January. Statistics Canada said that the nation's gross domestic product was flat in the reported month, following an unrevised 0.2% rise in the prior month. The soft figures were set out by gas and oil extraction that was offset by stronger retail and wholesale trade sectors.

The Japanese Yen fluctuated in the same range against the US Dollar on the country's household spending and job market data. The USD/JPY currency pair added some pips to continue nearing the 113.30 level.

Japanese household expenditure rose more than anticipated in November, while the unemployment rate reached 45-year low and consumer price growth ticked up in the same period, providing the Bank of Japan some hope that the recovery could bring the inflation rate to its goal of 2%. The country's jobless rate fell unexpectedly to 2.7%, while job availability was at 44-year high, suggesting lingering job market's recovery. Separate data indicated that household spending rose 1.8% for the month, far above expectations for a 0.6% increase.

Headlines/Economic Data

General Trend: Asian indices trade mixed amid lack of US leads due to Christmas holiday

• Taiwan listed Apple suppliers decline following report the US company said Q1 iPhone X sales may be below prior target
• Heavy data session for Japan: Nov jobless rate lowest since Nov 1993, Core CPI the highest since March 2015
• BoJ Kuroda reiterated 'powerful' monetary easing stance
• Markets in Australia, Hong Kong and New Zealand closed on Tuesday. Also multiple market closures In Europe

Japan

• Nikkei 225 opened -0.1%; closed -0.2%
• Department store Takashimaya +3.5% (reported 9-month earnings)
• (JP) Japan MoF FY18/19 defense spending ¥5.1911T, record high and 6th consecutive rise
• (JP) JAPAN NOV NATIONAL CPI Y/Y: 0.6% V 0.5%E; EX FRESH FOOD (CORE) Y/Y: 0.9% (highest since March 2015*) V 0.8%E
• (JP) JAPAN NOV JOBLESS RATE: 2.7% V 2.8%E (lowest level since Nov 1993); Job-to-Applicant ratio: 1.56 v 1.56e
• (JP) Japan Dec Tokyo CPI Y/Y: 1.0% v 0.6%e; Ex-Fresh Food (Core) Y/Y: 0.8% v 0.7%e
• (JP) JAPAN NOV OVERALL HOUSEHOLD SPENDING Y/Y: 1.7% V 0.5%E
• (JP) Bank of Japan (BOJ) Oct 30-31 Policy Meeting Minutes: BOJ must persistently pursue powerful monetary easing, additional easing measures should not be implemented now
• (JP) Japan Fin Min Aso: Deflation was caused by inappropriate response of Govt and BOJ
• (JP) Bank of Japan (BOJ) Exec Dir Miyanoya: prolonged monetary easing is weighing heavily on bank profits, many regional banks could be hurt in the long-run from intensifying competition that forces lenders to cut rates
• 6502.JP Being sued by 97 investors seeking ¥33B in damages – press
• (JP) Japan MoF sells ¥2.2T v ¥2.2T indicated in 0.10% 2-yr JGBs; avg yield -0.136%; bid to cover 4.32x

Korea

• Kospi opened +0.3%
• LG Display +1.3%: South Korea government approves KRW1.8T investment planned for China
• Chipmakers decline: Samsung Electronics -0.5%, Hynix -1.2%
• (KR) South Korea Govt and steelmakers in talks on ways to address US trade protectionism, including adjusting steel exports - Korean press
• (KR) Bank of Korea (BOK) sells KRW630B 1-yr monetary stabilization bonds at 1.90%
• (KR) According to think tank Hyundai Research Institute (HRI) an economic recovery without a wage increase has been picked as one of top 10 global trends next year - Korean press
• (KR) South Korea: See no particular activity by North Korea to launch satellite

China/Hong Kong

• Hang Seng closed for holiday, Shanghai Composite opened -0.1%
• (CN) PBoC head of research Xu Zhong: local governments should be allowed to go bankrupt in a bid to rein in excessive borrowing – CBN
• (CN) PBoC OMO: Skips OMO v skips prior; Net drain CNY50B v CNY120B drain prior (3rd consecutive skip)
• USD/CNY (CN) China PBoC sets yuan reference rate at 6.5416 v 6.5683 prior (strongest setting since Sept 13th)
• (CN) China PBOC Adviser Huang: High leverage ratio may lead to crisis; China slowdown, no govt bailouts to accumulate risks
• (CN) China Ministry of Industry and Information Technology (MIIT) sees 2018 industrial production growth ~6% (in line with 2017 target) - US financial press

Australia/New Zealand

• ASX 200 closed for holiday

Other Asia

• (MY) Malaysia Central Bank (BNM) short term rates to remain stable on intervention
• (PH) Philippine Central Bank (BSP): See little need to tighten policy now, inflation not flashing warning sign yet
• (SG) Singapore Nov CPI M/M: 0.6% v 0.3%e; Y/Y: 0.6% v 0.6%e; Core CPI Y/Y: 1.5% v 1.5%e (**Note this is the measure monitored by the MAS)
• (SG) Singapore Nov Industrial Production M/M: -2.3% v -0.5%e; Y/Y: 5.3% v 8.1
• (SG) Singapore to release Q4 GDP data on Tuesday, Jan 2nd (first major Asian economy to release Q4 GDP data)
• Keppel Corp -3.4%: Offshore & Marine unit to pay ~$422M fine

North America

• US markets to resume trading on Tuesday. Canada closed in observance of Boxing Day
• AAPL Said to have told suppliers Q1 iPhone X sales will be 30M v 50M units prior - Taiwan press
• (US) US financial press article examines possible implications of tax-related corporate repatriations on the US dollar; analysts unclear on impact

Europe

• EUR/USD: Financial Press article comments on the sharp and brief decline seen in EUR on Christmas Day; The Euro declined by 3% in minutes, says the article.
• (DE) German Finance Ministry Dec Monthly Report: Fiscal Balance €16.1B for Jan-Nov period
• (UK) Ineos issued update on Forties oil and gas pipeline (450K bpd): Says repair of the pipeline is now 'mechanically complete'; pressure testing has
• started; reiterates full flows should resume in early Jan
• Credit Suisse: Sees Q4 writedown of CHF2.3B due to US tax reforms
• Various markets in Europe will be closed on Tuesday in observance of holidays, including France, Germany, Spain, Switzerland, UK and Italy.

Levels as of 01:00ET

• Nikkei225 -0.2%, Hang Seng closed; Shanghai Composite +0.5%; ASX200 closed, Kospi -0.2%; Taiex -1%
• Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.3%; FTSE100 +0.0%
• EUR 1.1875-1.1863; JPY 113.36-113.19; AUD 0.7725-0.7711;NZD 0.7037-0.7017
• Feb Gold +0.3% at $1,282/oz; Feb Crude Oil +0.2% at $58.53/brl; Mar Copper +0.3% at $3.26/lb

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