Sample Category Title

Notes/Observations

• German State CPI data softer from month-ago levels with bulk of today's reading below forecasts of the upcoming German Composite Nov CPI data

Asia:

• South Korea Nov Industrial Production M/M: -1.7% v -0.2%e; Y/Y: 0.1% v 1.4%e
• Japan Nov Jobless Rate: 2.5% v 2.4%e (2nd straight rise)
• Japan Dec Tokyo CPI Y/Y: 0.3% v 0.5%e; CPI Ex-Fresh Food Y/Y: 0.9% v 0.9%e; CPI Ex-Fresh Food/Energy Y/Y: 0.6% v 0.6%e
• Japan Nov Preliminary Industrial Production M/M: -1.1% v -1.5%e; Y/Y: 1.4% v 0.6%e
• Japan Nov Retail Sales M/M: -1.0% v -0.4%e; Retail Trade Y/Y: 1.4% v 2.1%e Department Store/Supermarket Sales: -0.4%e v -0.8% prior
• Japan 10-year JGB yield turned negative for the first time since 2017
• China said to plan to expedite reviews related to foreign-controlled brokerages

Europe:

• Finland's Liikanen said to be seen as most likely candidate to become the head of the ECB
• UK Labour Party Leader Corbyn (opposition) called on PM May to recall parliament early from Christmas break to hold the "meaningful vote" on Brexit

Americas:

• US government shutdown continued, Senate has adjourned until Dec 31st. Shutdown likely to extend into Jan

Energy:

• Weekly API Oil Inventories: Crude: +6.9M v +3.5M prior

Macro

• (EU) Eurozone: ECB's Knot played down growth slowdown, indicating that while it is "unmissable" that growth is now slowing down, "a large part of the world economy is now operating at full capacity. Then you can hardly expect anything else than that growth falls back a little." He also said that in the Eurozone core inflation is still not showing any signs of life, although while he repeated that QE is now part of the ECB's toolkit, it isn't "a standard instrument, and it should therefore only be used in the future if the risk of deflation is evident".
• (ES) Spain: Preliminary December HICP inflation dipped to just 1.2% y/y down from 1.7% y/y in November. The initial German states also lower reported lower headline rates. It all suggests that Eurozone HICP is set to close out the year below the 2% limit, which will give the ECB justification to continue with it's very accommodative policy stance.

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +1.7% at 335.2, FTSE +1.7% at 6697, DAX +1.8% at 10589, CAC-40 +1.7% at 4675, IBEX-35 +1.4% at 8484, FTSE MIB +1.6% at 18357, SMI +2.4% at 8394, S&P 500 Futures 0.3%]

Market Focal Points/Key Themes:

Equities

• European Indices trade higher across the board rebounding after sharp losses over the past week, aided by relative strength in the US after a sharp reversal late in the US session. On a light morning for corporate news, Xaar trades over 10% lower after warning on Full year Revenues. Damiani trades higher after receiving a €8.55/shr tender offer from Leading Jewels, while CRH trades over 2% higher on commencement of its €200M share buyback. Elsewhere Airbus and Leonardo trades slightly higher on reports of a €1.4B Helicopter deal in Spain.
• Materials: CRH PLC [CRH.UK] +2.5% (share buyback program)
• Financials: MedioBanca [MB.IT] +1.5% (CEO comments on acquisitions), Baloise Holding [BALN.CH] +2% (investment)
• Industrials: Leonardo-Finmeccanica Spa [LDO.IT] +1%, Airbus [AIR.FR] +2% (said to have been awarded order wit Airbus), Sequana [SEQ.FR] +3% (terminated divestments)
• Technology: Xaar [XAR.UK] -12.5% (trading update)

Speakers

• Italy PM Conte year-end press conference reiterated that govt was committed to avoiding VAT increase in coming years. Saw 2019 minimum GDP growth at 1.0%
• Poland Labor Min Rafalska stated that 2019 unemployment rate was seen declining
• Hungary Fin Min Varga: 2019 net borrowing seen at HUF998B. Plans net HUF-denominated bond issuance at HUF947B (includes buybacks and switch auctions). Govt planned to double the stock of govt debt held by retail investors in coming years
• Indonesia Chief Economy Min Nasution: 2019 GDP growth seen between 5.3-5.4%
• China Ministry of Finance (MOF) To step up local govt debt management in 2019; to prevent and mitigate debt risks. To strictly curb local govt implicit debts in 2019 and largely increase local govt special bond quota. To cut taxes and fees at a larger scale during the upcoming year and reiterated govt stance to adopt proactive fiscal policy

Currencies/Fixed Income

• The recent pick-up in equity price volatility has prompted flows into various safe-haven currencies like the Japanese yen and the Swiss franc. The European equity price action saw gains in the session but continued concerns on global growth still weighed on overall risk sentiment

Economic Data

• (NL) Netherlands Dec Producer Confidence Index: 7.5 v 7.2 prior
• (RU) Russia Dec PMI Manufacturing: 51.7 v 52.6 prior
• (NO) Norway Nov Retail Sales (includes auto/fuel) M/M: 0.9% v 0.8%e
• (FI) Finland Nov House Price Index M/M: +0.7 v -1.0% prior; Y/Y: 1.0 v 0.2% prior
• (TR) Turkey Dec Economic Confidence: 75.2 v 73.7 prior
• (TH) Thailand Nov Current Account Balance: $1.6B v $1.1Be; Overall Balance of Payment (BOP): +$0.4B v -$0.9B prior; Trade Account Balance: $0.7B v $1.3B prior; Exports Y/Y: 0.2% v 8.4% prior; Imports Y/Y: 16.2% v 13.3% prior
• (CN) Weekly Shanghai copper inventories (SHFE): 118.7K v 110.7K tons prior
• (DE) Germany Dec CPI Saxony M/M: +0.4% v -0.1% prior; Y/Y: 1.9% v 2.1% prior
• (ES) Spain Q3 Final GDP Q/Q: 0.6% v 0.6%e; Y/Y: 2.4% v 2.5%e
• (ES) Spain Dec Preliminary CPI M/M: -0.4% v -0.1%e; Y/Y: 1.2% v 1.5%e
• (ES) Spain Dec Preliminary CPI EU Harmonized M/M: -0.5% v -0.1%e; Y/Y: 1.2% v 1.6%e
• (CH) Swiss Dec KOF Leading Indicator: 96.3 v 98.8e
• (AT) Austria Nov PPI M/M: -0.3% v +0.4% prior; Y/Y: 2.5% v 3.4% prior
• (RU) Russia Narrow Money Supply w/e Dec 21st (RUB): 10.48T v 10.38T prior
• (SE) Sweden Nov Trade Balance (SEK): +4.9B v -8.4B prior
• (CN) China Q3 Final Current Account: $23.3B v $16.0B prelim
• (DE) Germany Dec CPI Hesse M/M: -0.1% v +0.3% prior; Y/Y: 1.4% v 2.1% prior
• (DE) Germany Dec CPI Bavaria M/M: 0.0% v 0.3% prior; Y/Y: 2.2% v 2.7% prior
• (NO) Norway Central Bank (Norges) Jan Daily FX Purchases (NOK): -350M v -350M prior
• (ES) Spain Oct Current Account Balance: €0.3B v €0.9B prior
• (UK) Nov BBA Loans for Housing: 39.4K v 38.9Ke
• (DE) Germany Dec CPI North Rhine Westphalia M/M: 0.0% v 0.3% prior; Y/Y: 1.8% v 2.4% prior
• (RO) Romania Nov M3 Money Supply Y/Y: 10.9% v 9.4% prior
• (BR) Brazil Dec FGV Inflation IGPM M/M: -1.1% v -1.1%e; Y/Y: 7.5% v 7.5%e

Fixed Income Issuance

• (IN) India sold total INR120B vs. INR120B indicated in 2023, 2028, 2033 and 2046 bonds
• (CH) Switzerland sold CHF279.7M in 12-month Bills; Yield: -0.792% v -0.791% prior
• (IT) Italy Debt Agency (Tesoro) sold total €4.25B vs. €3.25-4.25B indicated range in 5-year and 10-year BTP bonds (3 tranches)
• Sold €2.0B vs. €1.5-2.0B indicated range in 2.45% Oct 2023 BTP bonds; Avg Yield: 1.79% v 2.35% prior; Bid-to-cover: 1.34x v 1.34x prior
• Sold €1.511B in 2.8% Dec 2028 BTP bonds; Avg Yield: 2.70% v 3.24% prior; Bid-to-cover: 1.53x v 1.41x prior
• Sold €739M in 2.0% 2028 BTP bonds (off-the-run); Avg Yield: 2.50% v 2.70% prior; Bid-to-cover: 2.03x v 1.53x prior
• (IT) Italy Debt Agency (Tesoro) sold €750M vs. €250-750M indicated range in Sept 2025 CCTeu (Floating Rate Note); Avg Yield: 1.81% v 2.31% prior; Bid-to-cover: 2.02x v 1.96x prior

Looking Ahead

• (DE) Germany Dec CPI Brandenburg M/M: No est v 0.1% prior; Y/Y: No est v 1.8% prior
• (DE) Germany Dec CPI Rhineland-Palatinate M/M: No est v 0.3% prior; Y/Y: No est v 2.5% prior
• (MX) Mexico Nov YTD Budget Balance (MXN): No est v -275.2B prior
• (IT) Bank of Italy (BOI) 3Q Credit Conditions and Risk
• 06:00 (BR) Brazil Nov National Unemployment Rate: 11.5%e v 11.7% prior
• 06:00 (PT) Portugal Nov Industrial Production M/M: No est v -0.9% prior; Y/Y: No est v -0.3% prior
• 06:00 (PT) Portugal Nov Retail Sales M/M: No est v -0.3% prior; Y/Y: No est v 2.3% prior
• 06:00 (UK) DMO cancels 1-month, 3-month and 6-month bill auction
• 06:30 (IN) India Weekly Forex Reserves w/e Dec 14th: No est v $393.1B prior
• 06:30 (IS) Iceland cancelled planned Bill auction
• 06:45 (US) Daily Libor Fixing
• 07:00 (IN) India announces upcoming bill issuance (held on Wed)
• 07:30 (BR) Brazil Nov Primary Budget Balance (BRL): -15.5Be v +7.8B prior; Nominal Budget Balance: -41.2Be v -6.1B prior; Net Debt to GDP Ratio: 53.2%e v 53.3% prior
• (RU) Russia Q3 Final GDP (3rd reading): 1.5%e v 1.5% prelim
• (RU) Russia Dec Preliminary CPI M/M: 0.7%e v 0.5% prior; Y/Y: 4.1%e v 3.8% prior; CPI YTD: 4.1%e v 3.4% prior
• (RU) Russia Dec Preliminary CPI Core M/M: 0.5%e v 0.4% prior; Y/Y: 3.7%e v 3.4% prior
• 08:00 (DE) Germany Dec Preliminary CPI M/M: 0.3%e v 0.1% prior; Y/Y: 1.9%e v 2.3% prior
• 08:00 (DE) Germany Dec Preliminary CPI EU Harmonized M/M: 0.4%e v 0.1% prior; Y/Y: 1.9%e v 2.2% prior
• 08:30 (US) Nov Advance Goods Trade Balance: -$76.0Be v -$77.0B prior (revised from -$77.2B)
• 08:30 (US) Nov Preliminary Wholesale Inventories M/M: 0.5%e v 0.9% prior; Retail Inventories M/M: No est v 0.9% prior
• 08:30 (US) Weekly USDA Net Export Sales
• 09:00 (MX) Mexico Nov Trade Balance: $0.2Be v $2.9B prior
• 09:45 (US) Dec Chicago Purchasing Manager: 60.3e v 66.4 prior
• 10:00 (US) Nov Pending Home Sales M/M: +1.0%e v -2.6% prior; Y/Y: No est v -4.6% prior
• 10:30 Weekly EIA Natural Gas Inventories
• 11:00 (US) Weekly DOE Crude Oil Inventories
• 13:00 (US) Weekly Baker Hughes Rig count data
• 14:00 (CO) Colombia Central Bank Dec Minutes

Weekend data:

Sat:

• (RU) Russia Q3 Final GDP (3rd reading): 1.5%e v 1.5% prelim
• (RU) Russia Dec Preliminary CPI M/M: 0.7%e v 0.5% prior; Y/Y: 4.1%e v 3.8% prior; CPI YTD: 4.1%e v 3.4% prior
• (RU) Russia Dec Preliminary CPI Core M/M: 0.5%e v 0.4% prior; Y/Y: 3.7%e v 3.4% prior
• 01:00 (RU) Russia Dec PMI Services: 55.4e v 55.6 prior; PMI Composite: No est v 55.0 prior
• 08:00 (RU) Russia Nov Current Account Balance: No est v -$0.9B prior
• 08:00 (RU) Russia Q3 Preliminary Current Account Balance: No est v $26.4B prior

Sun:

• 18:00 (KR) South Korea Dec CPI M/M: +0.1%e v -0.7% prior; Y/Y: 1.7%e v 2.0% prior; CPI Core Y/Y: No est v 1.3% prior
• 20:00 (CN) China Dec Manufacturing PMI: 50.0e v 50.0 prior; Non-Manufacturing PMI: 53.2e v 53.4 prior

The DAX Index has posted sharp gains in the Friday session, recouping the losses seen on Thursday. Currently, the index is at 10,574, up 1.0 percent on the day. On the release front, Germany will publish Preliminary CPI, a key gauge of consumer inflation. The indicator slipped to 0.1% in November, but is expected to improve to 0.3% in December.

Global stock markets have taken investors on a roller coaster ride, which has helped boost the greenback as risk appetite has soured. Eurozone and German economic activity has been hampered by the global trade war, which has taken a bite out of the export sector and dampened consumer confidence. The massive volatility has left investors jittery and sent risk appetite sharply lower. As well, the Italian budget crisis and Brexit remain serious headaches for policymakers. With the global trade war in full force, traders can expect the volatility in the equity markets to continue into the New Year.

The sole eurozone indicator on Thursday was the monthly ECB economic calendar. The prognosis was pessimistic, with the bank projecting that global economic activity would soften in 2019. As for the eurozone, the report found that GDP increased by just 0.2% in the third quarter, after growth of 0.4% in the prior two quarters. If fourth-quarter numbers are soft, the DAX could face further headwinds.

EUR/USD has posted gains in the Friday session, after posting considerable gains on Thursday. On the release front, Germany will publish Preliminary CPI, a key gauge of consumer inflation. The indicator slipped to 0.1% in November, but is expected to improve to 0.3% in December. In the U.S., today’s key event is Chicago PMI, which is expected to slip to 61.4 in December, down from 66.4 a month ago.

The euro has performed well in recent weeks and is on track to end December with gains of above 1 percent. This positive trend is all the more impressive, given the turmoil that has gripped the equity markets, as well as lukewarm data in the eurozone and Germany. Global stock markets have taken investors on a roller coaster ride, which has helped boost the greenback as risk appetite has soured. Eurozone and German economic activity has been hampered by the global trade war, which has taken a bite out of the export sector and dampened consumer confidence. As well, the Italian budget crisis and Brexit remain serious headaches for policymakers, but the euro has proven to be surprisingly resilient in the face of these challenges. The ECB has given the eurozone economy a vote of confidence by wrapping up its stimulus program, and if economic activity improves early in the New Year, the euro could make inroads against the dollar.

Investor risk appetite has improved, following reports on Wednesday that a U.S. delegation would travel to China to hold trade talks in the first week of January. The ongoing trade dispute between the world’s two largest economies has caused havoc in the equity markets and boosted the U.S dollar against its rivals. President Trump has agreed to suspend further tariffs on China while the sides are talking. A breakthrough might be too tall an order, but the fact that the sides are meeting face-to-face for the first time in months will likely improve the mood of jittery investors.

The US dollar has continued to weaken against the Japanese yen during the European trading session, with price edging closer to the current weekly and monthly trading low. A break below the 110.26 support level is likely to prompt heavy technical selling towards the 110.00 level. USDJPY traders now look to the US equity market open and the release of important housing data from the US economy.

The USDJPY pair is heavily bearish while trading below the 110.26 level, key technical support is then found at the 110.00 and 109.76 levels.

If USDJPY pair trades above the 110.80 level, buyers may test towards the 111.00 and 111.35 resistance levels.

The British pound remains confined to range-bound trading against the greenback on Friday, despite broad-based in the US dollar Index. Sellers failed to break below the 1.2600 support level on Thursday, further encouraging short-term technical buying in the pair. It is worth noting that the GBPUSD remains extremely weak while price trades below the important 1.2660 level.

The GBPUSD pair is strongly bearish while trading below the 1.2600 level, key support remains at the 1.2580 and 1.2528 levels.

If the GBPUSD pair trades above the 1.2660 level, buyers may test towards the 1.2700 and 1.2735 resistance levels.

AUDUSD is seeing some positive momentum today after touching an almost 35-month trough of 0.7016 on Thursday. However, the upside momentum is weak, with the %K and %D lines of the stochastic oscillator posting a so-far unconvincing bullish cross. Looking at the MACD though, there is no sign yet of an upside correction as the histogram continues to fall further below the signal line in negative territory.

Immediate support is in the 0.7020 region. Breaching this barrier would push the pair to fresh lows towards the 123.6% Fibonacci extension of the upleg from 0.7020 to 0.7393 at 0.9632. Deeper losses would bring into scope the 138.2% Fibonacci extension at 0.6878.

However, if today’s upside drive gathers traction, the bulls could aim to recapture the 0.71 handle, which is the 78.6% Fibonacci retracement. Even stronger gains could lift the pair towards the 61.8% Fibonacci at 0.7163. But the price would need to rise further, beyond the key 0.72 level, taking it above the 50-day moving average and the 50% Fibonacci, in order to change the short-term bearish bias to a neutral or bullish one.

In the medium-term picture, although the bearish structure remains intact, a shift to a neutral outlook is possible in the coming weeks if AUDUSD fails to make a fresh low.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.13518
Open: 1.14305
% chg. over the last day: +0.69
Day's range: 1.14267 – 1.14673
52 wk range: 1.1214 – 1.2557

During the last two days of trading, the USD weakened against the basket of major currencies. The EUR/USD quotes grew by 100 points. The currency is under pressure due to renewed trading disputes between the US and China, a political ambiguousness in the White House and weak economic reports. The Consumer Trust Index for December lowered to 128.1 instead of expected 133.7. The positions should be opened from the key levels of 1.14300 and 1.14650. The trading instrument has a potential for further growth.

The Economic News Feed for 28.12.2018:

Unfinished Real Estate Sales Index (US) – 17:00 (GMT+2:00);

The price has fixed above 50 MA and 200 MA which points toward the power of the buyers.

The MACD histogram is in the positive zone and above the signal line, which gives a strong signal towards the purchase of EUR/USD.

The Stochastic Oscillator is in the neutral zone, the %K line is crossing the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.14300, 1.14000, 1.13600
Resistance levels: 1.14650, 1.14850, 1.15000

If the price fixes above the resistance level of 1.14650 expect further growth of the EUR/USD toward 1.14850-1.15000.

Alternatively the quotes can descend toward 1.14200-1.14000.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.26311
Open: 1.26425
% chg. over the last day: +0.09
Day's range: 1.26390 – 1.26721
52 wk range: 1.2477 – 1.4378

The GBP remains in a long flat. There is no single defined trend. The financial market participants are waiting for additional drivers. You should open positions from the key levels of 1.26300 and 1.26700, as well as keep an eye on the real estate market in the US.

The Economic News Feed for 28.12.2018 is calm.

The indicators do not provide precise signals, the price has crossed 50 MA and 200 MA.

The MACD histogram is close to 0.

The Stochastic Oscillator is near the neutral zone, the %K line is below the %D line, which points toward a bearish mood.

Trading recommendations

Support levels: 1.26300, 1.26000, 1.25700
Resistance levels: 1.26700, 1.27000, 1.27350

If the price fixes above 1.26700 consider buying GBP/USD. The movement will tend toward 1.27000-1.27350.

Alternatively the quotes can descend toward 1.26000-1.25750.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.35679
Open: 1.36129
% chg. over the last day: +0.37
Day's range: 1.36030 – 1.36255
52 wk range: 1.2248 – 1.4132

CAD keeps consolidating, there is no single trend. There is a possibility of a technical correction after a long rally. The key support and resistance levels are 1.35700 and 1.36250. Positions should be opened from these levels. You should keep an eye on the oil quotes dynamic.

The Economic News Feed for 28.12.2018 is calm.

The indicators do not provide precise signals, the price has crossed 50 MA.

The MACD histogram is located close to 0.

The Stochastic Oscillator is in the neutral zone, the %K line is crossing the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.35700, 1.35250, 1.34900
Resistance levels: 1.36250, 1.36600

If the price fixes above the resistance level of 1.36250 expect further growth of the USD/CAD quotes. The movement will tend toward 1.36600-1.36800.

Alternatively the quotes can correct toward 1.35600-1.35300.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 111.301
Open: 110.983
% chg. over the last day: -0.47
Day's range: 110.350 – 111.011
52 wk range: 104.56 – 114.56

The USD/JPY is showing an ambiguous technical picture. The trading instrument is moving sidewards as the demand for the safe have currencies growth. The key support and resistance levels are 110.200 and 110.700. You should keep an eye on the US economic news feed and open positions form the key levels.

During the Asian trading session Japan published some ambiguous economic reports

The price fixed below 50 MA and 200 MA which points toward the power of the sellers.

The MACD histogram moved to the negative zone which points toward the bearish mood.

The Stochastic Oscillator is in the oversold zone, the %K line crosses the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 110.200, 110.000
Resistance levels: 110.700, 111.000, 111.450

If the price fixes above the resistance level of 110.700 expect the quotes to grow toward USD/JPY. The movement will tend toward 111.000-111.400.

Alternatively the quotes can descend toward 110.000-109.800.

UK Foreign Minister Jeremy Hunt is confidence that Prime Minister Theresa May's Brexit deal could get through the parliament if EU would clarify that the Irish backstop solution is temporary. He told BBC radio that "If it is temporary, then parliament can live with that," and, "we can get this through, absolutely can."

UK MPs are due to return in the week of January 7 and the debate on Brexit agreement will resume. For now, the rescheduled vote on the agreement will planned to be held in the week of January 14.

The single European currency has continued to appreciate in an ascending channel against the Japanese Yen. The currency pair tested the upper boundary of the channel pattern at the end of yesterday's trading session.

Currently, the exchange rate is stranded between SMAs. The combination of the 50– and 100-hour SMAs is providing support at 126.40, while the 200-hour simple moving average is providing resistance at 127.06.

As for the near future, it is likely that the EUR/JPY currency exchange rate will continue to maintain the junior ascending channel during the following trading session.

The Australian Dollar depreciated about 58 base points against the US Dollar on Thursday. However, the situation changes during the end of Thursday's trading session when the currency pair reversed from the 0.7020 level and started gaining strength.

The exchange rate breached the upper boundary of a one-week descending channel at 0.7040 during the European trading session on Friday.

Given that the currency exchange rate has breached the resistance level formed by the upper boundary of the descending channel and the 50– hour simple moving average, it is likely that the pair will target the weekly PP at 0.7090 today.