Sample Category Title

• Sweden Central Bank raises its Repo Rate but doubts emerge on further hikes down the road
• Global economic slowdown has not taken a toll yet on Swiss trade; recovery in the watch industry boosts Trade surplus
• UK Nov Retail Sales data handily beats forecasts; focus turns to BOE rate decision

Asia:

• BOJ left its policy steady (as expected) with Interest Rate on Excess Reserves (IOER) unchanged at -0.10%; maintained its policy framework of "QQE with Yield Control" around 0.00% and asset purchases at annual pace of ¥80T
• Australia Nov Employment Change: +37.0K v +20.0K; Unemployment Rate: 5.1% v 5.0%e
• New Zealand Q3 GDP Q/Q: 0.3% v 0.6%e; Y/Y: 2.6% v 2.8%e

Europe:

• Germany Finance Ministry Monthly Report noted that the leading indicators generally pointed to stable exports but risks remain due to a weakening global expansion
• Italy Dep PM Salvini: To look at EU budget. Italy would not accept cuts to fishing, agriculture spending; EU budget must change; Italy still could veto it

Americas:

• FOMC raised the target band by 25bps to 2.25-2.50% range (as expected). Expected 'some' further gradual increases in fed funds rate would be consistent with sustained economic expansion, strong jobs market, and inflation objective
• Fed Chair Powell: Forecast modestly lower path for fed funds rate which should keep us toward our mandate goal; now expect 2 rate hikes next year instead of 3
• US Senate passes bill funding government agencies through Feb 8, sends measure to House (Note: House was expected to pass the measure on Thursday)

Macro

• (SE) Sweden: The Riksbank unexpectedly raised the repo rate 25bp to -0.25%, reporting that "economic activity is strong and the conditions are good for inflation to remain lose to the inflation target in the period ahead". Inflation expectations have established around 2% thus the "need for a highly expansionary monetary policy has decreased slightly". The markets are concerned around heightened volatility and the uncertain risk backdrop whilst the central banks see slowing growth, but only against the background of high capacity utilization and in the case of Europe, improving wage growth and robust labor markets.
• (UK) United Kingdom: November retail sales were much better than expected rising to 1.4% m/m and 3.6% y/y, up from respective October figures of -0.4% and 2.4%. The release showed a strong 5.3% m/m jump in household goods which was the main driver behind the headline beat. Black Friday sales promotions were a significant factor. In the three months to November, sales grew 0.4% versus the prior three months, driven by growth in non-food stores and online retailing. December retail sales are set to be strong, too, based on anecdotal indications. Near record levels of employment and rising real wages are the fundamental factors underpinning consumer confidence despite Brexit.
• (UK) United Kingdom: No policy changes are expected from the BOE today, and there are unlikely to be much change in guidance with the meeting coming so soon after last month's quarterly Inflation Report.
• (JP) Japan: The BOJ's Kuroda said it wasn't a problem if JGB yields turn negative and wasn't concerned with the recent drop in JGB yields. He also said it was too early to discus the exit from the easing measures and the BoJ is closely watching protectionist moves. The BOJ are clearly concerned about current market conditions but there is evidence to suggest that the BOJ's aggressive purchases have deprived the market of liquidity and have always ran the risk of destabilizing it.

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 -1.26% at 337.74, FTSE -0.49% at 6,733.00, DAX -1.00% at 10,658.66, CAC-40 -1.32% at 4,714.43, IBEX-35 -0.97% at 8,684.35, FTSE MIB -1.14% at 18,725.50 , SMI -1.39% 8,416.60, S&P 500 Futures -0.25%]
• Market Focal Points/Key Themes: European Indices trade sharply lower across the board tracking weaker Asian markets and US Indices overnight. The fall in Indices mark multi month lows across the board, the FTSE250 reaches a 2 year low on the continued sell off. US futures continue their decline this morning following the FOMC rate decision yesterday. On the corporate front Mining names trade under pressure following the fall in commodity prices with the likes of Rio Tinto, Antofagasta and Anglo American among the notable decliners. Kier Group continues to fall after a low take up of its Rights Issue; B&O trades over 25% lower after a profit warning; Hutchinson Chi-Med also falls after cutting its profit outlook. Bucking the trend shares of KPS rise after results, with Leonteq and Midatech Pharma among other risers this morning. Looking ahead notable earners include Walgreens Boots Alliance, Conagra Brands, Accenture, Carnival and Blackberry among others.

Equities

• Consumer discretionary: Swatch [UHR.CH] -1.5%, Richemont SA [CFR.CH] -2% (Swiss watch exports data), Greencore Group [GNC.UK] +6% (tender offer), Bang & Olufsen [BO.DK] -29% (profit warning)
• Energy: Engie [ENGI.FR] -1.5% (French govt likely to introduce law on energy in Feb 2019)
• Financials: Leonteq [LEON.CH] +1.5% (affirms guidance)
• Healthcare: AstraZeneca [AZN.UK] -0.5% (studies met primary endpoints), Midatech Pharma [MTPH.UK] +8% (corporate update; partnership), Hutchison China MediTech Ltd [HCM.UK] -14% (profit warning), Abivax SA [ABVX.FR] -3% (to present trial data)
• Industrials: BMW [BMW.DE] -1%, Daimler [DAI.DE] -1% (Daimler and BMW reportedly in early stage talks over cooperation on key car components), Kier Group [KIE.UK] -4% (rights issue update)
• Technology: Wirecard [WDI.DE] -2% (has 5-10% market share in German online transactions), SimCorp [SIM.DK] -2% (contract awarded)

Speakers

• Sweden Central Bank (Riksbank) Policy Statement noted that the next potential hike likely to take place in H2 2019 as indicated by forecast for Repo rate; Saw about 2 rate hikes a year after next increase. Even though inflation had been lower than expected, conditions remained good for inflation to stay close to target going forward
• Sweden Central Bank (Riksbank) Gov Ingves post rate decision press conference noted that monetary policy remained very expansionary; inflation was seen more or less stable at the 2.0% target
• House of Commons Leader Leadsom: Government not seeking a second referendum; priority of Government is to get PM May's deal passed
• Bank of Spain (BOS): Q4 GDP growth seen at 0.6% (**Note: same pace as Q3)
• Russia President Putin annual news conference noted that 2018 GDP growth was seen 1.8%; inflation at an acceptable level. Believed that it was bad that no talks on new START Treaty were being held between US and Russia but hoped that common sense would prevail
• Brazil Central Bank (BCB) Quarterly Inflation Report (QIR) noted that the baseline scenario was balanced and warranted keeping rates steady. 2019 GDP growth forecasts were more uncertain and conditional on reforms
• BOJ Gov Kuroda post rate decision press conference noted that the upward price momentum remained intact; risked tilted to the downside; needed to monitor risks posed by US-China trade friction. No change in BOJ's main scenario as domestic fundamentals remained solid. So far impact from trade friction had been limited. If trade protectionism was prolonged then it would have a broad impact on global economy. BOJ not seeking exit from current monetary policy at this time. Saw no need to change policy for side effects at this time. Would consider further monetary easing as appropriate if momentum towards price target was undermined
• Japan Cabinet Office (Govt) Dec Monthly Economic Report maintained itss overall economic assessment that the domestic economy was recovering at moderate pace
• Japan Vice Finance Minister for International Affairs Asakawa (top currency official): Concerning moves in FX and equity markets this week as volatility increased. Needed to keep watching the markets closely; would act appropriately as needed. Discussed steps to respond at meeting with MOF, FSA and BOJ
• Indonesia Central Bank (BI) Gov Warjiyo post rate decision statement noted that the decision to keep policy steady was consistent with efforts to reduce current account deficit and maintain attractiveness for foreign investors; took into account global interest rate trend for coming months. Current rate was able to maintain attractiveness but the central bank would maintain front-loaded, preemptive policy and not wait for Fed Funds Rate (FFR) to rise
• Taiwan Central Bank (CBC) policy Statement noted that ot would maintain appropriate its loose monetary policy as the current inflation outlook remained mild
• China Commerce Ministry (MOFCOM) Spokesman Gao stated in his weekly press conference that the govt had plans to meet US side in Jan to hold further trade talks. China could arrange meeting and calls 'at any time'
• China PBoC: To step up management of Bank's Required Reserves
• IEA chief Birol: US oil production seen accelerating with serious growth through 2025. He did not see a sharp increase in oil prices in the short-term unless there was a geopolitical crisis
• OPEC Sec Gen Barkindo: Vital to make production adjustment public to support market sentiment and confidence

Currencies/Fixed Income

• USD weakened against the major pairs during the EU session following the Fed's dovish hike on Wednesday. The greenback was initially steady during the Asian session as traders' initial take on the Fed's policy statement and economic projections was that it was becoming slightly more dovish but not at the pace the market wanted.
• EUR/USD tested a 1-month high as the pair tested above the 1.1470 level
• USD/JPY lower by 0.7% to test below the 112 level
• EUR/SEK slumped 1% after a surprise rate hike by the Swedish Riksbank. The cross tested 10.25 level in the aftermath but some doubts did creep back in whether the Riksbank had the scope for more hikes in 2019

Economic Data

• (NL) Netherlands Nov Unemployment Rate: 3.5% v 3.7% prior
• (JP) Japan Nov Final Machine Tool Orders Y/Y: -17.0 v -16.8% prelim
• (CH) Swiss Nov Trade Balance (CHF): 4.7B v 3.5 prior Real Exports M/M: 1.0% v 5/3% prior; Real Imports M/M: -1.5 v -2.5% prior; Watch Exports Y/Y: 3.9% v 7.4% prior
• (JP) Japan Nov Convenience Store Sales Y/Y: +0.6 v -1.5% prior
• (HU) Hungary Q3 Current Account: €0.2B v €0.2Be
• (HU) Hungary Oct Average Gross Wages Y/Y: 10.8% v 10.2%e
• (TW) Taiwan Nov Export Orders Y/Y: -2.1% v +0.8%e
• (SE) Sweden Central Bank (Riksbank) raises Repo Rate by 25bps to -0.25% (as not expected) for its 1st hike since July 2011
• (HK) Hong Kong Nov CPI Composite Y/Y: 2.6% v 2.5%
• (EU) Euro Zone Oct Current Account Balance €23.0B v €17.6B prior
• (IT) Italy Nov PPI M/M: -0.8% v +1.8% prior; Y/Y: 5.7% v 7.1% prior
• (IT) Italy Oct Current Account Balance: €6.1B v €3.1B prior
• (IS) Iceland Dec CPI M/M: 0.7% v 0.2% prior; Y/Y: 3.3% v 3.3% prior
• (IS) Iceland Nov Wage Index M/M: 0.1% v 0.4% prior; Y/Y: 6.2% v 6.2% prior
• (TW) Taiwan Central Bank (CBC) left the Benchmark Interest Rate unchanged at 1.375%; as expected
• (UK) Nov Retail Sales (Ex Auto/fuel) M/M: 1.2% v 0.2%e; Y/Y: 3.8% v 2.3%e
• (UK) Nov Retail Sales (Including Auto/fuel) M/M: 1.4% v 0.3%e; Y/Y: 3.6% v 2.0%e
• (GR) Greece Oct Current Account Balance: -€0.9B v +€0.5B prior

Fixed Income Issuance

• None seen

Looking Ahead

• (PT) Portugal Oct Current Account Balance: No est v €0.2B prior
• (AR) Argentina Nov Budget Balance (ARS): No est v -16.6B prior
• (AR) Argentina Dec Consumer Confidence Index: No est v 32.1 prior
• 05:30 (HU) Hungary Debt Agency (AKK) to sell bonds (3-tranches)
• 06:00 (UK) Dec CBI Retailing Reported Sales: 15e v 19 prior; Total Distribution Sales: No est v 18 prior
• 06:00 (IE) Ireland Nov PPI M/M: No est v -6.4% prior; Y/Y: No est v -2.1% prior
• 06:00 (IL) Israel Oct Manufacturing Production M/M: No est v -3.3% prior
• 06:00 (BR) Brazil CONAB Sugarcane crop forecast
• 06:00 (CZ) Czech Republic to sell Bills
• 06:00 (RO) Romania to sell RON600M in 4.25% 2023 Bonds
• 06:45 (US) Daily Libor Fixing
• 07:00 (UK) Bank of England (BOE) Interest Rate Decision: Expected to leave Interest Rate unchanged at 0.75%; maintain Asset Purchase Target at £435B
• 07:00 (UK) Bank of England (BOE) Dec Minutes
• 07:00 (CZ) Czech Central Bank (CNB) Interest Rate Decision: Expected to leave Repurchase Rate unchanged at 1.75%
• 08:00 (RU) Russia Gold and Forex Reserve w/e Dec 14th No est v $463.6B prior
• 08:00 (PL) Poland Central Bank (NBP) Dec Minutes
• 08:10 (UK) Baltic Dry Bulk Index
• 08:30 (US) Dec Philadelphia Fed Business Outlook: 15.0e v 12.9 prior
• 08:30 (US) Initial Jobless Claims: 215Ke v 206K prior; Continuing Claims: 1.66Me v 1.661M prior
• 08:30 (CA) Canada Oct Wholesale Trade Sales M/M: +0.4%e v -0.5% prior
• 08:30 (US) Weekly USDA Net Export Sales
• 09:00 (MX7) Mexico Oct Retail Sales M/M: -0.3%e v +1.0% prior; Y/Y: 3.9%e v 4.1% prior
• 09:15 (CZ) Czech Central Bank Gov Rusnok to hold post Rate Decision press conference
• 10:00 (US) Nov Leading Index: 0.0%e v 0.1% prior
• 10:30 Weekly EIA Natural Gas Inventories
• 11:00 (US) Treasury announcement for upcoming 2-year, 5-year amd 7-year auctions during week of Dec 24th
• 11:30 (US) Treasury to sell 4-Week and 8-Week Bills
• 12:00 (CA) Canada to sell 3-year notes
• 13:00 (US) Treasury to sell 5-Year TIPS Reopening
• 14:00 (MX) Mexico Central Bank (Banxico) Interest Rate Decision: expected to raise Overnight Rate by 25bps to 8.25%
• 14:00 (AR) Argentina Oct Shop Center Sales Y/Y: No est v -15.1% prior; Supermarket Sales Y/Y: No est v -7.9% prior

The Australian dollar regained ground and bounced on Thursday, following Fed-inspired strong fall on Wednesday when the pair dipped to 1 1/2 month low at 0.7086.

Fresh bulls emerged after the greenback lost traction after short-lived rally on Fed's surprise hawkish steer and boosted by better than expected Australian labor data (37K new employments in Nov vs 20K f/c).

Recovery could be seen as positioning for fresh extension of the downtrend from 0.7393 (03 Dec high) if broken base of widening daily cloud (0.7166) caps.

In addition, 20/55 SMA bear-cross (0.7185), daily cloud top (0.7197) and Fibo 38.2% of 0.7393/0.7085 (0.7200) mark another significant obstacles and reinforce strong resistance zone between 0.7166 and 0.7200, where recovery may face very strong headwinds.

Near-term outlook is expected to remain negative and look for further downside after correction, unless recovery manages to break and close above 0.7200 pivot that would sideline bears and signal stronger correction.

Res: 0.7145, 0.7166, 0.7185, 0.7200
Sup: 0.7108, 0.7085, 0.7020, 0.7000

The pair extends steep fall into fifth straight day and was down nearly 0.7% in early Thursday’s trading, following little benefit for the dollar on more hawkish than expected Fed on Wednesday.

The greenback came under fresh pressure after brief post-Fed pause on growing risk-off mode on heightening global risks and decision from BoJ to keep ultra-low interest rates, but showed readiness to boost its massive stimulus program if the situation deteriorates.

Dollar’s free fall took out the last obstacle at 112.04 (Fibo 76.4% of 111.37/114.20 rally) following eventual clear break below key 112.46 support (daily cloud base / Fibo 61.8%) after two previous attempts failed.

Bears eye key short-term support at 111.37 (26 Oct trough), violation of which would unmask another pivotal support at 110.76 (Fibo 38.2% of larger 104.63/114.54 ascend).

Bearish daily techs support, however, oversold conditions warn that bears may take a breather on approach to 111.37 target.

Dollar-negative sentiment keeps bears firmly in play, with limited corrective upticks expected to offer better opportunities for re-entering downtrend.

Broken Fibo 76.4% support and Wednesday’s spike low mark initial resistances at 112.04/08 and guard key barrier – daily cloud base (112.46).

Res: 112.04, 112.24, 112.46, 112.60
Sup: 111.62, 111.37, 110.76, 110.00

The USD/CHF currency pair has been trading in a descending channel pattern during the past six-week. During this period, the pair re-tested the upper boundary of the descending channel pattern.

The exchange rate was stranded between SMAs during the morning hours of Thursday's trading session. The 100-hour simple moving average at 0.9947 was providing resistance, while the 50-hour SMA was providing support at 0.9928.

Technical indicators favour bullish signals. Therefore, a potential upside breakout is likely to occur during the following trading days.

However, the 200-hour SMA could hinder the currency exchange rate from surging.

The Canadian Dollar has been depreciating against the Swiss Franc since the beginning of December. This movement has been bounded in a descending channel pattern.

The currency pair breached the lower boundary of a dominant ascending channel at 0.7372 during the morning hours of Thursday's trading session.

Given that a breakout had occurred, it is likely that the currency exchange rate will continue its decline within this session.

The short-term target for the CAD/CHF exchange rate will be near a swing low of 0.7344.

During the previous trading session, the gold depreciated against the US Dollar by 1304 pips or 1.04% to end the trading session at the 1,243.36 mark. On Thursday, the gold was recovering to trade at the 1,248.00 level.

Most likely, the yellow metal will surge upwards due to the support level of the 55-hour simple moving average. Moreover, it expected that the rate could reach the 1,254.00 level during the day.

On the other side, the gold might trade sideways to stay at the 1,248.00 level.

On Wednesday, the currency exchange rate broke the bottom boundary of the dominant pattern at 112.20 mark. During Thursday's morning hours, the US Dollar depreciated against the Japanese Yen by 76 pips or 0.68% to trade at the 111.86 mark.

In regards to the near-term future, most likely, the currency exchange rate will trade sideways between the 50.00% Fibo and the weekly S2 at 111.64 mark. Besides, the 55-hour SMA might push the rate to trade at the 111.80 level.

On the other hand, the currency exchange rate could pass the support levels of the weekly S1 and the 38.20% Fibo to trade at the 111.20 level.

On Wednesday, the British Pound was trading sideways to stay inside the previously drawn medium pattern. During Thursday's morning hours, the rate was supported by the 55-hour SMA to trade at 1.2665 mark.

The British Pound waits for a break-out which might occur during today's UK Retail Sales m/m data release at 9:30 GMT. The rate could break the resistance of the upper boundary of the medium pattern at 1.2600 to trade at the 1.2700 level.

However, the currency exchange rate could trade downside to pass through the monthly S1 to trade at the 1.2560 level during the trading session on Thursday.

During the previous trading day, the European Single Currency reached the 1.1440 level but lately was depreciated against the US Dollar to fall to 1.1360 level. On Thursday morning, the currency exchange rate was trading near the weekly R1 at 1.1410 mark.

It is expected that the rate will surge upwards to reach the 50.00% Fibo at 1.1460 mark. Besides, the 55-hour SMA will try to support the rate during the day.

On the other side, the European Single Currency could depreciate against the US Dollar to pass through most of the technical indicators to trade below the weekly pivot point at the 1.1320 level.

Cable is up and remaining constructive in early Thursday's trading despite Fed surprise, which showed limited negative impact.

Upbeat UK retail sales numbers in Nov (m/m 1.4% vs 0.3% f/c, y/y 3.6% vs 1.9% f/c) helped renewed bulls to extend and crack pivotal 20SMA (1.2693) under which the action in last two days stalled.

The BoE MPC is meeting today with wide expectations for unchanged rates amid Brexit uncertainty, with minutes of the previous policy meeting, also due today, showing wide expectations for unanimous vote for leaving rates unchanged.

Brexit remains the key influence on sterling, with fresh twist on Brexit saga coming from the comments that another Brexit vote is still possible.

Eventual break above falling 20SMA would generate initial bullish signal, confirmation of which requires extension and close above key near-term barriers at 1.2743/52 (Fibo 38.2% of 1.3174/1.2476/falling 30SMA).

Stronger momentum underpins, but still weak daily techs and prevailing negative sentiment threaten of another recovery stall, which would fuel scenario that favors selling upticks under 20SMA.

Res: 1.2705, 1.2743, 1.2752, 1.2810
Sup: 1.2640, 1.2626, 1.2677, 1.2564