Sample Category Title

The Aussie dollar holds firm footing and returned above 0.80 handle after dipping to 0.7978 in Asia.

Reversal signal that was generated on strong upside rejection at 0.8035 on Friday which left Gravestone Doji candle, is fading on fresh bullish acceleration today.

Break and close above 0.8035 high is needed to neutralize existing bearish threats and open way for fresh extension of steep uptrend from 0.7500 trough towards key barrier at 0.8124 (08 Sep peak).

Session low at 0.7978 marks initial support ahead of pivotal point at 0.7940 (higher base, reinforced by rising 10SMA), loss of which would generate stronger bearish signal.

Res: 0.8038, 0.8065, 0.8102, 0.8124
Sup: 0.7978, 0.7940, 0.7923, 0.7900

Notes/Observations

Senate to vote on later today to try to reopen govt and fund it through Feb 8th

BOJ and ECB rate decisions this week with focus on potential forward-looking discussions about the prospects for policy normalization

Asia:

Australia PM Turnbull affirms next election won’t be held until 2019

PBOC Adviser Sheng Songcheng:reiterated of no need for PBoC to raise benchmark interest rates as it would raise the cost of financing in the real economy and would not be conducive to financial deleveraging

China State Planner: Confident Chinese economy will maintain steady, good momentum in2018 ; will further guide Chinese firms in their overseas investment

Japan Cabinet Office confirmed speculation that it would push back its forecast for achieving primary budget surplus by two years to FY27

Europe:

Germany Social Democrats (SPD) voted to support the opening of formal coalition talks with Chancellor Merkel’s conservative bloc with vote by 362 to 279

Renewed speculation that EU officials could pick a new ECB vice president with the Eurogroup ministers to kick off the process today

PM May: Reiterates Britain wants to have a comprehensive trade deal with the EU as well as a defense pact in place once its leaves the bloc

France President Macron: UK could get a special trade deal with the EU after Brexit, UK will not have full access to the single market without accepting its rules

Former UKIP leader Nigel Farage said to be considering forming a new pro Brexit party after becoming dismayed with internal politics and scandal within UKIP since his resignation as leader 18 months ago

President Trumps anger with UK PM May puts US-UK trade deal after Brexit is at risk; relationship said to have "soured”. Trump is still furious with the way he has been treated by the British government and warned his deteriorating relationship with May is likely to kill any prospect of a swift post-Brexit trade deal. May will attempt to clear the air with Trump when she meets him at Davos (if he attends)

Fitch raised Spain sovereign rating one notch to A- from BBB+; revised outlook to Stable from Positive

S&P raised Greece sovereign rating one notch to B from B-; maintained outlook Positive

Americas:

US Senator Majority Leader Mcconnell (R-KY): Set next Senate procedural vote on 3-week stopgap spending bill for noon EST Monday

Senate minority leader Schumer (D-NY): Yet to reach agreement on path forward

Senator Flake (R-AZ):; Bipartisan meeting to be held on Monday at 10 am EST to discuss continuing resolution (CR)

President Trump if Govt shutdown stalemate continued, Republicans should use procedural “nuclear option” to change Senate rules and pass long-term spending bill

Energy:

Russia and OPEC reaffirmed that they will continue with oil-production cuts until year-end to clear a global glut, indicate willingness to cooperate beyond

Economic Data:

(NL) Netherlands Jan Consumer Confidence: 24 v 25 prior

(NL) Netherlands Nov Consumer Spending Y/Y: 2.6% v 1.7% prior

(JP) Japan Dec Convenience Store Sales Y/Y: -0.3% v -0.3% prior

(NL) Netherlands Dec House Price Index M/M: 0.4% v 0.5% prior; Y/Y: 8,2% v 8.2% prior

(NO) Norway Q4 Industrial Confidence: 6.4 v 5.0e

(TW) Taiwan Dec Export Orders Y/Y: 17.5% v 12.2%e

(TW) Taiwan Dec Unemployment Rate: 3.7% v 3.7%e

(CH) Swiss Dec M3 Money Supply Y/Y: 3.2 v 4.3% prior

Fixed Income Issuance:

None seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 flat at 400.7 , FTSE +0.1% at 7735, DAX -0.1% at 13423, CAC-40 -0.1% at 5520 , IBEX-35 +0.4% at 10519, FTSE MIB +0.1% at 237773 , SMI -0.2% at 9494, S&P 500 Futures -0.1%]

Market Focal Points/Key Themes:

European Indices trade mixed this morning, with outperformance in the Spanish Ibex, as Indices trade off the sesssion highs in rangebound trade ahead of a busy earnings week.
Swiss financial giant UBS trades under pressure after reporting inline results, with electrical retailer Dixons Carphone trading higher with LFL growth of 6%. In the M&A space Sanofi confirmed the acquisition of Biovertativ in an $11.6B deal, while Richemont announced a voluntary tender for Yoox Net-A-Porter. Elsewhere in the UK Ocado trades over 10% higher after a partnership with Sobeys; Bookmaker Ladbrokes and William Hill trade sharply lower after reports of a new £2M maximum in gaming machines.
Looking ahead notable earners include Haliburton and Wynn Resorts.

Movers

Consumer Discretionary [Dixons Carphone [DC.UK] +2% (Chirstmas update), Ocado [OCDO.UK] +13% (Partnership with Sobeys), William Hill [WMH.UK] -12.5%, Ladbrokes [LCL.UK] -10% (UK said to be set to announce a new £2 maximum stake on lucrative high stakes gaming machines)]

Financials [UBS [UBSG.CH] -1.6% (Earnings)]

Technology [Aveva [AVV.UK] +5.0% (Trading update), Lending Tech [LTG.UK] +6.8% (Trading update)]

Healthcare [Sanofi [SAN.FR] -3.8% (To acquire Bioverativ for $11.6B) Swedish Orphan Biovitrum [SOBI.SE] +11% (up in sympathy)]

Speakers

ECB bond purchases are deviating from capital-key requirements with purchases of Italian, French, Austrian, Belgian Govt bonds last year was about 10% above the level justified by the capital key

EU draft document: Greece needs additional debt-mitigating measures (**note comments aheda of today's Eurogroup meeting)

Czech Central Bank Gov Rusnok: Saw a very good probability of a rate hike in Feb while no enormous inflation pressure on domestic economy

Spain prosecutor said to have asked Supreme Court judge Llarena to activate an European arrest warrant for former Catalan President Puigdemont (**Note: Request comes after Puigdemont left Brussels for Copenhagen)

Iraq Oil Min Luaibi: Oil prices are heading in the right direction

Currencies

The USD was only modestly softer despite the continued shutdown of the US govt

The EUR/USD remained about a big figure away from its recent 3-month highs of 1.2323 as the pair seemed to have failed to benefit from bullish news. Focus turning to ECB rate decision on Thursday.

USD/JPY seemed to break its historical correlation with US bond yields. Dealers noted that US bond yields are not supporting USD/JPY pair. BOJ meets on Tuesday with no change expected in policy but to focus on its forward communication especially on the inflation front. Japan will release its Dec COPI data on Friday with analysts noting that an overshoot in the core CPI would raise the possibility of the BOJ moving to normalize policy

Monday's Eurogroup meeting of eurozone finance ministers should sign off the latest bailout tranche and allow the closing of the third review. The fourth review is expected to be completed in June. The current Greek bailout runs until August

Fixed Income

Bund Futures trades down 11 ticks at 160.47 after initially rallying as strong support lies sub 160 level. Continued upside targets 162.00, while a move lower targets the159.56 low.

Gilt futures trade at 123.50 down 12 ticks, hanging near Friday’s low. Support continues to stand at 123.55 then 122.83, with upside resistance at 124.25 then 124.96.

Monday’s liquidity report showed Friday’s excess liquidity rose to €1.863T from €1.860T prior. Use of the marginal lending facility fell to €237M from €434M prior.

Corporate issuance saw banks dominate with $47B issuance in high-grade raised last week

Looking Ahead

05:25 (BR) Brazil Central Bank Weekly Economists Survey

06:00 (DE) German Bundesbank monthly report

06:00 (IE) Ireland Dec PPI M/M: No est v -0.4% prior; Y/Y: No est v -3.6% prior

06:00 (TR) Turkey to sell 2024 Floating Rate bonds

06:00 (IL) Israel to sell Bonds

06:45 (US) Daily Libor Fixing

07:00 (RO) Romania to sell 3.25% 2024 Bonds

08:00 (ES) Spain Debt Agency (Tesoro) announces size of upcoming actions in week (to sell 3-month and 9-month Bills on Tues)

08:00 (IN) India announces details of upcoming bond sale (held on Fridays)

08:05 (UK) Baltic Dry Bulk Index

08:30 (US) Dec Chicago Fed National Activity Index: 0.22e v 0.15 prior

08:30 (CA) Canada Nov Wholesale Trade Sales M/M: 1.2%e v 1.5% prior

08:55 (FR) France Debt Agency (AFT) to sell combined €4.8-6.0B in 3-month, 6-month and 12-month BTF Bills

09:00 (MX) Mexico Dec Unemployment Rate (Seasonally Adj): 3.5%e v 3.5% prior; Unemployment Rate (Unadj):3.3%e v 3.4% prior

09:00 IMF updates its World Economic Outlook (WEO)

09:00 (EU) Eurogroup Finance Ministers meet

09:30 (EU) ECB announces Covered-Bond Purchases

09:35 (EU) ECB calls for bids in 7-Day Main Refinancing Tender

10:00 (CO) Colombia Nov Trade Balance: -$0.8Be v -$0.6B prior; Total Imports: $4.0Be v $3.9B prior

11:00 (US) Senate Republicans will have a conference meeting

11:30 (US) Treasury to sell 3-Month and 6-Month Bills

12:00 (US) Senate expected to vote to fund the government through Feb. 8th (expected not to pass)

14:00 (CO) Colombia Nov Economic Activity Index (Monthly GDP) Y/Y: 1.6%e V 1.4% prior

15:00 (MX) Mexico Citibanamex Survey of Economists

21:00 (PH) Philippines Q4 GDP Q/Q: 1.6%e v 1.3% prior; Y/Y: 6.7%e v 6.9% prior, GDP Annual Y/Y: 6.5%e v 6.8% prior

(JP) Bank of Japan (BOJ) Interest Rate Decision: Expected to leave Interest Rate unchanged at -0.10%

Crude oil is slightly flattening but appears ready to ascend. Hourly resistance is given at 64.89 (15/01/2018 high). Strong support is given at 60.93 (05/01/2018 low). Expected to keep increasing as demand seems very strong.

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

Silver is continuing its bounce moves after a sharp correction but keeps heading lower. The short-term technical structure is negative as long as prices remain below the hourly resistance at 17.43 (15/01/2018 high). A key resistance stands at 18.21 (08/09/2017 high). An hourly support lies at 16.80 (reaction low).

In the long-term, the trend is rather negative. Further downside is very likely. The pair is trading at its 200 DMA. Resistance is located at 21.58 (10/07/2014 high). Strong support can be found at 11.75 (20/04/2009).

Gold recovers from recent traders' profit taking and keeps increasing. Hourly support is given at 1306 (04/01/2018 low). Resistance is located at 1345 (15/01/2018 high) and the commodity is targeting a strong resistance point at 1357 (08/09/2017 high).

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

Bitcoin is confirming further recovery after 17/01/2018 collapse. Hourly support is located at 10'775 (22/12/2017 low). In the short-term, the technical structure suggests a continued bearish momentum. Expected to show further decline.

In the long-term, the digital currency has had an exponential growth but also presented important downturns. There are decent likelihood that the currency could reach $15'000 (December 2017 levels) in 2018. Bitcoin is trading far above its 200 DMA (5K+ gap).

EUR/CHF bullish momentum has resumed but appears weaker. Hourly resistance is given at 1.1832 (15/01/2018 high). The technical structure suggests further short-term downside moves.

In the longer term, the technical structure has reversed. Strong resistance is given at 1.20 (level before the unpeg). Yet, the ECB's slowing QE programm is likely to cause buying pressures on the euro, which should weigh in favour of the EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

EUR/GBP is trading mixed. The pair is trading between support ranging at 0.88023 (18/01/2018 low) and resistance at 0.8929 (01/12/2017 high). Expected to show further sideways trading.

In the long-term, the pair has largely recovered from lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading in the range of its 200 DMA. Strong resistance can be found at 0.9500 (psychological level)

AUD/USD's upside pressures is slowed. Hourly resistance at 0.8025 (17/01/2018 high) is broken. New resistance point is at 0.8040 (19/01/2018 high). Support at 0.7849 (12/01/2018 low) is distanced. The road is wide open for further upside.

In the long-term, the trend is turning positive. Key supports stands at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8164 (14/05/2015 high) is needed to invalidate our long-term bearish view.

USD/CAD remains weak but is nearing the 1.2589 (29/12/2018 high) resistance after a slight decrease close to the 1.2403 (15/01/2018) resistance that was slightly broken. Further resistance is given at 1.2624 (05/12/2017). Expected to show renewed short-term weakness. •

In the longer term, the pair has broken longterm support that can be found at 1.2461 (16/03/2015 low). New support point is identified at 1.2101 (17/04/2015 low). Strong resistance is given at 1.4690 (22/01/2016 high). The pair is likely to head lower.