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The DAX index has recorded slight gains in the Tuesday session. Currently, the DAX is at 13,042.50, up 0.33% on the day. On the release front, German GfK Consumer Climate is expected to edge up to 10.8 points. In the US, Fed Chair Designate Jerome Powell will testify at his confirmation hearing before the Senate Banking Committee. On Wednesday, Germany releases Preliminary CPI. The US will publish Preliminary GDP and Pending Home Sales and Janet Yellen will testify before a congressional committee.

Investors like they see from the German economy, and the DAX continues to trade at high levels. The euro and the stock markets remain steady, despite the political crisis in Germany. There are renewed hopes that another election can be avoided, as the SPD (socialist democrats) have reluctantly agreed to hold coalition talks with Angela Merkel’s CDU. The SPD was the junior partner in the previous government, and is expected to demand a bigger role in a new government if it agrees to a “grand” coalition. Talks between the CDU, the Greens and the Free Democrats imploded when the Free Democrats bolted, saying there was not enough common ground to continue talks. Merkel is reluctant to run a weak minority government, and if talks with the SPD don’t make progress, the likely result would be another election. For its part, SPD lawmakers are split on whether to join up with the CDU, but Merkel may choose to make her former coalition partner an offer it can’t refuse, such as the powerful finance minister.

The spotlight will be on Jerome Powell, who testifies before the Senate Banking Committee on Tuesday for his confirmation hearing. Powell is widely expected to maintain Janet Yellen’s cautious monetary stance, which has been marked by small, incremental rate hikes. Powell inherits an economy that is in excellent shape, but persistently low inflation remains a nagging problem. Fed policymakers have differing views on what to do about inflation, with some members proposing that the Fed drop its 2 percent target, in favor of a “gradually rising path” for prices. The Fed remains confounded by low inflation and wage growth, despite a labor market that is at full capacity. Still, the Fed will likely pull the rate trigger next month, and could raise rates up to 3 more times in 2018 if the economy continues to expand at its current pace.

The Aussie dollar stands at the back foot on Tuesday following previous day’s strong upside rejection and repeated close below trendline resistance.

Fresh weakness is pressuring 10SMA support (0.7592) the lower boundary of near-term congestion between 10SMA and 20SMA), with increased downside risk expected on sustained break lower.

Bearish scenario look for hourly trough at 0.7555 (22 Nov low) and expose key support at 0.7530 (21 Nov multi-month low).

Alternative scenario needs firm break above 20SMA (0.7628) to neutralize downside risk.

Res: 0.7615, 0.7644, 0.7669, 0.7693
Sup: 0.7587, 0.7555, 0.7530, 0.7500

With most of the United States indulging in its own turkey vs cranberry sauce arbitrage into the Thanksgiving holiday, activity has been noisy but light on substance with a light data week globally.

Gold, silver and platinum continue to grind higher with gold failing at 1300.00 overnight. The question remains, is this a dollar-driven move as the U.S. yield curve flattens, or is this two month bottoming the start of a new trend? There is a definite lack of momentum in all three which suggests their fates remain tied to that of the dollar.

Palladium's chart maintains its long-term uptrend, but the shorter timescale suggests a welcome downside correction could be on the cards.

Copper broke it's descending triangle, tot he upside! price action remains constructive despite yesterdays pullback.

Natural gas falls from near the top of its multi-month range due to better than expected weather in the U.S. At the end of the day though, it's still in a range.

Brent and WTI Crude, in particular, see profit-taking ahead of the 30th November OPEC meeting. The charts suggest thought that the danger is still for deeper corrections to come although both are no longer overbought. Of the two, WTI looks more vulnerable as we head into oil's Thursday moment of truth.

The softs have diverged this week.

Sugar saw the best of it and continues to look constructive. It is testing the top of its six-month rage at 0.1500 with the 200-day moving average just behind that at 0.15100.

Soybean's chart is looking messy now, but as the dust settles prices are looking positive thanks to demand from China. As opposed to last week the beans look ready to test two month resistance.

Corn's week-long short squeeze was unwound in one day, and it is now marooned mid-range. Exports have been poor.

Wheat's global harvest weighs on prices as it tests support at 4.0340. We are still in a three-month range but long-term support looms at 3.9230.

Gold 00:00:00, Silver 00:03:05, Platinum 00:04:50, Palladium 00:07:00, Copper 00:08:50, Natural Gas 00:10:50, Brent Crude 00:12:10, WTI Oil 00:15:00, Sugar 00:16:10, Soybeans 00:17:55, Corn 00:20:00, Wheat 00:21:10

Notes/Observations

US Senate's vote on the tax reform (aimed for Thursday) said to be lacking support as 3 Republicans (Daines, Johnson and Corker) possibly voting ‘no. Trump is scheduled to address Senate Republicans today

BOE financial stability report raises countercyclical buffers (demands extra £6B from banks); session will also see BoC and the RBNZ release their financial stability reports

Euro Zone corporate lending growth at highest level since mid-2009

Korean exchanges were the first exchange to see the price of Bitcoin hit $10,000

Asia:

Japan PM Abe reiterated don't think necessary to make changes on accord with BoJ. Reiterated expects BoJ to continue easing policy.

BoJ Gov Kuroda reiterated global economy continues to recover. Did not see easy monetary policy hurting Japanese financial system so far; financial system has maintained stability

BOJ's Kataoka (dissenter): BoJ needed to take additional easing steps as inflation won't reach 2% around FY19. No need to think about exit strategy now, must focus on ways to hit inflation target

Europe:

Eurogroup Chief Dijsselbloem said to get a six month extension in position citing the difficult process of forming a German Govt

Portugal Parliament said to approve 2018 budget in final reading with budget deficit to GDP ratio set at 1.1% vs. 1.4% in 2017

Ireland Fianna Fail Justice spokesperson (opposition): unless deputy PM resigns, will force Ireland into new election

Ireland Foreign Min Coveney: we should wait under deputy PM tribunal evidence in Jan before making political judgment

Americas:

Fed Chair-designate Powell prepared congressional testimony expected interest rates to rise somewhat further from here; pledged to respond decisively to any new economic threats

Fed's Dudley (FOMC voter): Not particularly concerned that inflation was 'a little bit' below a Fed target; Reiterated we were gradually raising US interest rates; FOMC was 'very united' on appropriate policy path

Fed's Kashkari (dove, voter): Reiterated saw no reason to 'tap the breaks' on the economy, no reason to raise rates when inflation continued to run low

Fed's Kaplan (moderate, voter): backed rate hike in near future; remained mindful of Fed getting behind the curve

Senator Corker (R-TN): Could vote no on tax bill in committee if ‘trigger' not done. Wanted the tax bill to have 'trigger' to raise revenues if economic growth expectations were not met.

Aides to Sen Daines (R-MT): Senator is currently a no on tax bill; however is optimistic about changes

Energy:

Saudi Arabia Energy Minster Falih: No differences in OPEC on output pact extension; studies vary on time needed to balance oil stocks

Economic Data:

(DE) Germany Oct Import Price Index M/M: 0.6% v 0.4%e; Y/Y:2.6% v 2.5%e

(FI) Finland Oct House Price Index M/M: -0.5% v -0.3% prior; Y/Y: 0.4 v 1.6% prior

(TR) Turkey Nov Economic Confidence: 97.9 v 101.4 prior

(FR) France Nov Consumer Confidence: 102 v 101e

(ES) Spain Oct Adjusted Retail Sales Y/Y: -0.1% v +2.2%e; Retail Sales (unadj) Y/Y: -1.2% v +2.2% prior

(SE) Sweden Oct Retail Sales M/M: +0.1% v -0.1%e; Y/Y: 2.6% v 3.3%e

(SE) Sweden Oct Trade Balance (SEK): -3.1B v +3.2B prior

(EU) Euro Zone Oct M3 Money Supply Y/Y: 5.1% v 5.1%e

(IS) Iceland Nov CPI M/M: -0.2% v +0.5% prior; Y/Y: 1.7% v 1.9% prior

Fixed Income Issuance:

(ZA) South Africa sold total ZAR3.3B vs. ZAR3.3B indicated in 2026, 2030, 2040 and 2044 bonds

(IT) Italy Debt Agency (Tesoro) sold €5.5B vs. €5.5B indicated in 6-month Bills; Avg Yield: -0.436% v -0.400% prior; Bid-to-cover: 1.86x v 1.99x prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 +0.4%% at 386.6, FTSE +0.5% at 7420, DAX +0.4% at 13054, CAC-40 +0.6% at 5389, IBEX-35 +0.6% at 10120, FTSE MIB +0.5% at 22289, SMI +0.6% at 9318, S&P 500 Futures +0.1%]

Market Focal Points/Key Themes:

European Indices trade modestly higher across the board being led higher by Telcos and Autos. Earlier the OECD has lifted growth expectations for Germany, the Dax trades back above 13K.

Ocado outperforms after partnering with Casino in France on its Smart platform, while on the earnings front Topps Tiles, DataGroup trade higher, while Pets at Home trades sharply lower following results. Elsewhere Royal Dutch Shell lifted its FCF forecasts as well as announcing a strategic update. On the banking front UK banking names trade slightly lower despite passing the BoE stress test.

Looking ahead notable earners include Christopher Banks and ScotiaBank in Canada.

Equities

Consumer discretionary [Ocado [OCDO.UK] +19% , Casino [CO.FR] +2% (Partnership with Casino to develop Smart Platform), Scout 24 [G24.DE] -2.5% (share placement), Christian Hansen [CHR.DK] -3.4% (CEO to step down), Unilever [ULVR.UK] +0.8% (Investor day), Topps Tile [TPT.UK] +7% (Earnings)]

Technology: [Datagroup [D6H.DE] +2.9% (Earnings)]

Energy: [Royal Dutch Shell [RSDA.NL] +2.5% (Company strategy and financial outlook)]

Speakers

BOE Financial Stability review: No UK banks needed to raise capital following stress test; Raised countercyclical capital buffer to 1% by the end of 2018 from 0.5% to guard against economic shocks. Annual stress test of 7 UK banks revealed all of them could withstand a severe downturn in the domestic economy. Nationwide, Lloyds, Santander, Standard Chartered and HSBC passed the test outright; RBS and Barclays fell short on end-2016 data but had since boosted capital. Banks could keep lending even through a disorderly Brexit

BOE's Carney on Financial Stability review: Stress tests showed that banks could lend through an disorderly Brexit. Financial Policy Committee (FPC) was assessing the risks of a no-deal Brexit

ECB's Hansson (Estonia): ECB might end its asset purchase program in Sept 2018 given the ongoing solid economic developments

ECB called for consultations for input on high level features of a new unsecured overnight interest rate

UK Trade Sec Fox: Have gone far enough on Brexit talks to move onto issue of trade. Not afraid of not getting a Brexit agreement; could move to WTO

Spain Econ Min de Guindos: Catalan region economy contracted in Oct

OECD updated its economic outlook and noted that 2017 global growth would likely to be strongest since 2010. ECB should wait until 2020 to raise key interest rate

CzechCentral Bank Gov Rusnok: Would like to continue with normalizing policy. Domestic economy was growing fast and showing signs of over-heating

Russia Central Bank: Inflation expectations fell in Nov to 8.7%

Japan Cabinet Office (Govt) Monthly Economic Report for Nov maintained its overall economic assessment that economy was experiencing a moderate recovery

UAE Oil Min Mazrouei: OPEC to discuss extending production cuts by nine months until end of 2018. Vienna meeting 'wont be an easy meeting'; Hoping for another year of correction and recovery in oil market; Oil market recovery needs more time

OPEC members said back a 9-month extension of the current production cuts and is awaiting Russia's commitment

Currencies

USD was hovering near near a two-month lows as dealers awaited the confirmation hearing and first serious test for new Federal Reserve chair Jerome Powell. The USD was also facing headwinds from possible delays in the implementation of US tax cuts. Recent reports noted that Trump's tax plan could lacking support as 3 Republicans (Daines, Johnson and Corker).

GBP was softer in the session following the release of BoE financial stability report which reminded that a UK balance sheet was weak. BOE did noted that the largest banks would be able to withstand Britain crashing out of the EU. GBP/USD hovering around the 1.33 area and approx. 50 pips off its overnight highs

Fixed Income

Bund futures trade 163.25 up 8 ticks, as investors appear reluctant to go short with the persistent euro strength and global disinflation backdrop providing compelling arguments. Continued upside sees 163.40 then 163.63. A reversal targets 162.50 then 162.38.

Gilt futures trade at 125.39 up 11 ticks as markets await Brexit news. Continued upside eyeing 125.675 then 126.47. Downside targets include 124.90 then 124.24.

Tuesday's liquidity report showed Monday's excess liquidity remained steady at €1.850T. Use of the marginal lending facility fell to €315M from €420M prior.

Looking Ahead

(ES) Spain Oct YTD Budget Balance: No est v -€17.0B prior

05.30 (UK) Weekly John Lewis LFL sales data

05:30 (EU) ECB allotment in 7-day Main Financing Tender (MRO) tender

05:30 (HU) Hungary Debt Agency (AKK) to sell in 3-month Bills

05:30 (UK) DMO to sell £400M in 4% Jan 2060 Gilts

06:00 (IE) Ireland Oct Retail Sales Volume M/M: No est v -2.4% prior; Y/Y: No est v 1.2% prior

06:45 (US) Daily Libor Fixing

07:00 (DE) Germany Dec GfK Consumer Confidence: 10.7e v 10.7 prior

07:00 (IT) Italy Fin Min Podoan at event

07:00 (RU) Russia announces weekly OFZ bond auction

07:45 (US) Weekly Goldman Economist Chain Store Sales

08:00 (US) Treasury Sec Mnuchin with Fed's Dudley at conference

08:05 (UK) Baltic Dry Bulk Index

08:30 (US) Oct Advance Goods Trade Balance: -$65.0Be v -$64.1B prior

08:30 (US) Oct Preliminary Wholesale Inventories M/M: 0.4%e v 0.3% prior, Retail Inventories M/M: No est v -1.0% prior

08:30 (CA) Canada Oct Industrial Product Price M/M: +0.5%e v -0.3% prior; Raw Materials Price Index M/M: 3.0%e v 0.1% prior

08:55 (US) Weekly Redbook Sales

09:00 (US) Sept FHFA House Price Index M/M: 0.4%e v 0.7% prior; Q/Q: No est v 1.6% prior

09:00 (US) Sept S&P/ Case-Shiller 20-City M/M: 0.30%e v 0.45% prior; Y/Y: 6.04%e v 5.92% prior; House Price Index (HPI): No est v 202.87 prior

09:00 S&P Case-Shiller (overall) HPI Y/Y: No est v 6.07% prior; Overall HPI Index : No est v 195.05 prior

09:00 (EU) Weekly ECB Forex Reserves

09:00 (MX) Mexico Oct Unemployment Rate (Seasonally adj): 3.3%e v 3.3% prior, Unemployment Rate (unadj): 3.4%e v 3.6% prior

09:00 (BR) Brazil to sell I/L 2022, 2026, 2035 and 2055 Bonds

10:00 (US) Nov Consumer Confidence: 124.0e v 125.9 prior

10:00 (US) Nov Richmond Fed Manufacturing Index: 14e v 12 prior

10:00 (US) Senate Banking Committee holds hearing on Fed Chair Nominee Powell

10:15 (US) Fed's Harker (voter, hawk)

10:30 (CA) Bank of Canada (BOC) Financial System Review

11:30 (BR) Brazil Oct Central Govt Budget Balance (BRL): +3.0Be v -22.7B prior

11:30 (CA) Bank of Canada (BOC) Gov Poloz press conference

11:30 (US) Treasury to sell 4-Week Bills

13:00 (US) Treasury to sell 7-year notes

15:00 (NZ) New Zealand Central Bank (RBNZ) Financial Stability Report

16:30 (US) Weekly API Oil Inventories

The pair shows strong hesitation at 111.02 support (50% of 107.31/114.73 rally) which was repeatedly cracked (dips to 110.83/92 on Mon/Tue) but so far without clear break lower. Near-term action may hold in extended consolidation above 111.02 pivot, as slow stochastic is reversing from oversold territory and generating bullish signal. However, limited upside is expected (ideally to be capped by 200SMA (111.68) to keep bearish bias intact. Bears need sustained break below 111.02 to signal resumption and expose targets at 110.70 (daily cloud base) and 110.15 (Fibo 61.8% of 107.31/114.73). Only extension and close above daily cloud top (112.16) would neutralize downside risk and signal stronger correction.

Res: 111.38, 111.70, 112.16, 112.62
Sup: 111.02, 110.83, 110.70, 110.15

The WTI, went as planned as we could have seen in my previous analysis. Today we can see a rooftop pattern shaping up that is coming from W H1/D H5 confluence, and it is being held slightly above D L3 camarilla pivot. We can see the rooftop shape an need to be ready if breakout happens. For positional trades watch for POC zone 57.60-57.85 where the price could reject after a retracement. Breakout below D L3 and 4h close below 57.24 should make a continuation move towards 56.78 (ATR projection low) and 56.21 D L5 level.

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

Crude oil has finished its consolidation and is now ready to challenge the 60-dollar level. Expected to show continued increase. Support is given at a distance at 54.81 (14/11/2017 low)

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. For the time being the pair lies in an upside momentum. Strong support lies at 35.24 (05/04/2016) while resistance can now be found at 55.24 (03/01/2017 high).

Silver is heading higher. Hourly support can be found at 16.60 (27/10/2017 low). Hourly resistance is given at 17.46 (13/10/2017 high). Additional support can be found at 16.13 (06/10/2017 low).

In the long-term, the trend is rater negative. Further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).

Gold is pushing higher. The technical structure confirms the end of the consolidation phase. Support lies at a distance at 1251 (08/08/2017 high). Resistance is located at 1288 (20/10/2017).

In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low).

Bitcoin has jumped over the weekend. The technical structure shows a tremendous positive short-term momentum. Hourly support is located at 5605 (13/11/2017 low). Strong support stands very far at 2975 (22/08/2017 low). In the shortterm, the digital currency should continue rising above 10k.

In the long-term, the digital currency has had an exponential growth. There are decent likelihood that the asset will reach $40'000.