Sample Category Title

Notes/Observations

Euro Zone data continues to show the regional recovery is robust and broad-based

Germany's Nov industrial Production handily beats expectations

Unemployment Rate continues to fall with Italy at a 5-year low and Euro Zone at a 9-year low

BoJ aiming for a relative steepening of the back end after cutting purchases of debt maturing in the 10-25-year and more than 25-year sectors; will the BOJ will follow the lead of the Fed and other central banks in embarking on the rate hikes???

Koreas hold first official talks in two years; although deemed not a game-changer, it should reduce miscalculation risks

Asia:

Japan Nov Real Cash Earnings registers its 1st rise in 11-months (+0.1% v -0.1%e )

BOJ reduces planned daily purchases of 10-25 year and over 25-year JGBs each by ¥10B

China PBoC: Skips OMO for 12th straight session noting that liquidity was moderate (prior banking liquidity at relatively high level

China PBoC Gov Zhou: 2018 GDP growth seen at 6.4%, slowing due to deleveraging

South Korea and US to start annual military drills April 1st (delayed due to Olympics); Trump administration said to weigh a risky strategy as Seoul and Pyongyang prepare to meet. US officials debating if possible to mount limited military strike on North Korea.

South Korea Foreign Ministry: To consider temporary lifting of sanctions against North Korea if necessar

Europe:

Brexit Min Davis viewed EU's no-deal Brexit planning as 'damaging' to the process

Americas:

Fed's Bostic (2018 voter, dove): Fed may not need 3 or 4 rate hikes a year; policy is approaching a more neutral stance that could be close to 2%; Should continue to slowly remove accommodation. Fed should consider adoption of an inflation price level target; Price level targeting is really a very modest change

Fed's Williams (moderate, 2018 voter): central banks have less room to cut rates in the next crisis

President Trump: we are reviewing all trade agreements to ensure they are reciprocal; we're still working to get a better NAFTA deal. NAFTA ‘not the easiest negotiation' because Mexico and Canada are ‘making all of that money' on trade - Special counsel Muller likely to interview Trump as part of Russia probe; could happen within weeks

Economic Data:

(NL) Netherlands Dec CPI M/M: 0.0% v -0.2% prior; Y/Y: 1.3%e v 1.5% prior

(NL) Netherlands Dec CPI EU Harmonized M/M: -0.1%e v -0.4% prior; Y/Y: 1.2% v 1.5% prior

(CH) Swiss Dec Unemployment Rate: 3.3% v 3.2%e; Unemployment Rate (Seasonally adj): 3.1% v 3.0%e

(DE) Germany Nov Current Account: €25.4B v €25.3Be; Trade Balance: €23.7B v €21.3Be; Exports M/M: 4.1% v 1.2%e; Imports M/M: 2.3% v 0.4%e

(DE) Germany Nov Industrial Production M/M: 3.4% v 1.8%e; Y/Y: 5.6% v 3.9%e

(DK) Denmark Nov Current Account (DKK): 15.0Be; Trade Balance: 7.0Be

(FR) France Nov Trade Balance: -€5.7B v -€4.7Be

(FR) France Nov Current Account: -3.3B v -€2.6B prior

(CH)S wiss Dec Foreign Currency Reserves (CHF): 743.9B v 738.1B prior

(CZ) Czech Dec Unemployment Rate: 3.8% v 3.7%e

(CH) Swiss Nov Real Retail Sales Y/Y: -0.2% v -2.6% prior

(SE) Sweden Dec Budget Balance (SEK): -69.6B v +17.0B prior

(IT) Italy Nov Preliminary Unemployment Rate: 11.0% v 11.0%e (lowest since Sept 2012)

(EU) Euro Zone Nov Unemployment Rate: 8.7% v 8.7%e (lowest since JDec 2008 )

Fixed Income Issuance:

(ID) Indonesia sold total IDR13.0T vs. IDR9.0T indicated in 2018, 2020, 2022, 2025, 2031 and 2037 bonds

(NL) Netherlands Debt Agency (DSTA) sold €1.89B vs. €1.5-2.5B indicated range in 0% Jan 2024 DSL bond; Yield: 0.052% v 0.050% prior

(ZA) South Africa sold total ZAR3.3B vs. ZAR3.3B indicated range in 2032, 2040, 2044 and 2048 bonds

(CH) Switzerland sold CHF483.6M in 3-month Bills; Avg Yield: -0.872% v -1.05% prior

(AT) Austria Debt Agency (AFFA) sold total €1.38BB vs. €1.38B indicated range in 2027 and 2047 RAGB bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 +0.3% at 399.7 , FTSE +0.3% at 7720 , DAX +0.2% at 13394, CAC-40 +0.5% at 5514 , IBEX-35 +0.5% at 10450, FTSE MIB 0.6% at 22992 , SMI +0.4% at 9579, S&P 500 Futures +0.1%]

Market Focal Points/Key Themes: European markets trade higher higher across the board with outperformance in Italy as well as France. The French CAC tops 5500, while the Eurostoxx 600 approaches 400. Altice rebound after announces approval of a planned separation of Altice USA and Europe, on the M&A front Nestle has received an increased off for its US confectionery business to $2.5B from Ferrero. Elsewhere the retail sector has got a boost in the UK following strong Christmas sales figures out of UK Supermarket chain Morrisions, with Sainsburys set to report results tomorrow. Looking ahead earnings in the US include Acuity Brands and Schnitzer Steel, as well as a continuation of preliminary earnings out of numerous names ahead of various conferences.

Movers

Consumer Discretionary [ Morrisons [MRW.UK] +2.7% (Trading update), Robert Walters [RWA.UK] -2.0% (Trading update)]

Consumer Staples [Carr's Group [CARR.UK] +13% (Trading update)

Materials [SIG plc [SHI.UK] -1.3% (Trading update), Topps Tiles [TPT.UK] +9% (Trading update)]

Materials [ Bauer [B5A.DE] -7% (Cuts outlook) ]

Industrials [Carillion [CLLN.UK] -7% (No news for price rise yester), Bauer [B5A.DE] -7% (Cuts outlook)]

Healthcare [Bioquell [BQE.UK] +10% (Trading update), Abylnx [ABLX.BE] +8% (Chairman to resign)]

Telecom [ Altice [ATC.NL] +5.2% (Reorganisation)]

Real Estate [Persimmon [PSN.UK] -2.1% (Prelim FY17 results)]

Speakers

Spain PM Rajoy stated that the country would be close to balance budget in 2020. Catalonia was the only shadow over the outlook. Believed that 2018 GDP could be over 2.3% with a stable govt in Catalonia

Ireland Debt Agency (NTMA): Strong domestic economy facing rising risks

Former Italy PM Berlusconi: Euro should continue to be handled in the same manner that ECB's Draghi has done

North Korea restored military communication line with South Korea after holding hold first talks since 2015

Iran Oil Min Zanganeh: OPEC did not want to see Brent oil prices above $60/barrel because of shale oil

Currencies

USD was still trying to consolidate against the major European pairs in the session and its slight strength in the session was attributed to re-positioning following year-end losses.

EUR/USD was off approx. 0.3% to test 1.1930 area despite better German Industrial production data for Nov and continued drop in unemployment levels for various Euro Zone members

GBP was softer in the aftermath of the UK Cabinet reshuffle. Dealers noted that such an event took hold as PM May's ability came to light she could not successfully navigate the Brexit talks with such rebellion within the ranks. Although no major members were reshuffled, the GBP was unable to find any footing. GBP/USD was hovering around the 1.3520 area just ahead of the NY morning.

USD/JPY was holding onto its Asian session losses after the BoJ trimmed the size of a bond-buying operation that sent JGB yields higher. The price action stabilized during the European session as market participants did not believe the move was any early indication of the BoJ adjusting its yield curve management policy. The recent improvement in Japanese data seemed to remain hopeful the BoJ would eventually start to unwind its ultraloose policy somewhere down the road. Key support in the pair seen at 112.00 area in which any break could open the door for a bigger test lower.

Fixed Income

Bund Futures trade down 13 ticks at 161.64 as JGBs set the tone, ahead of a heavy supply week. A continued move below 161.00 low targets 160.71 then 160.45, with a continued rebound targeting 162.36.

Gilt futures trade at 124.48 down 23 ticks at the session lows and approaching last week's low. Continued upside eyeing 125.25 then 125.82. Downside targets include 124.25 then 123.75.

Monday's liquidity report showed Friday's excess liquidity rose to €1.847T from €1.838T prior. Use of the marginal lending facility fell rose to €40M from €54M prior.

Corporate issuance remained strong with Barclays and Vonovia coming to the market.

Looking Ahead

(AR) Argentina Central Bank Interest Rate Decision: Expected to leave 7-Day Repo Reference Rate unchanged at 28.75%

(RU) Russia Dec Sovereign Wealth Funds: Reserve Fund: $B v $17.1B prior; Wellbeing Fund: $B v $66.9B prior

(ZA) South Africa Dec Nammsa Vehicle sales Y/Y: No est v 7.2% prior

05.30 (UK) Weekly John Lewis LFL sales data

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

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

05:30 (DE) Germany to sell €0.5B in 0.10% Apr 2046 Inflation Link Bond (Bundei)

05:30 (UK) DMO to sell £2.25B of 1.25% 2027 Gilts

05:30 (BE) Belgium Debt Agency (BDA) to sell €2.7B in 3-month and 12-month Bills

06:00 (US) Dec NFIB Small Business Optimism: 107.8e v 107.5 prior

06:00 (PT) Portugal Nov Trade Balance: No est v -€1.5B prior

06:00 (BR) Brazil Nov Retail Sales M/M: 0.2%e v 0.9% prior; Y/Y: 3.8%e v 2.5% prior

06:00 (BR) Brazil Nov Broad Retail Sales M/M: +0.3%e v -1.4% prior; Y/Y: 5.9%e v 7.5% prior

06:00 (PL) Poland PM Morawiecki said to announce new Cabinet

06:00 (TR) Turkey to sell 2019 bonds

06:30 (EU) ESM to sell €2.0B in 3-month bills; Avg Yield: % v -0.7320% prior; Bid-to-cover: x v 6.3x prior (Dec 5th 2017)

06:45 (US) Daily Libor Fixing

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

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

08:05 (UK) Baltic Dry Bulk Index

08:15 (CA) Canada Dec Annualized Housing Starts: 211.0Ke v 252.2K prior

08:55 (US) Weekly Redbook Sales

09:00 (MX) Mexico Dec CPI M/M: 0.6%e v 1.0% prior; Y/Y: 6.8%e v 6.6% prior; Core CPI M/M: 0.5%e v 0.3% prior

09:00 (EU) Weekly ECB Forex Reserves

10:00 (US) Nov JOLTS Job Openings: 6.025Me v 5.996M prior

10:00 (US) Fed's Kashkari (non-voter, dove) on panel

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

12:00 (US) DOE Short-Term Crude Outlook

13:00 (US) Treasuries to sell $24B in 3-Year Notes

16:30 (US) Weekly API Oil Inventories

Crude oil is has broken resistance given at 62.21 (04/01/2018 high). Strong support is given at 55.82 (07/12/2017 low). Expected to keep increasing.

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 has been bouncing on hourly support at 16.99 (04/01/2018 low). Hourly resistance is given at 17.46 (16/10/2017 high). Expected to show continued bullish pressures.

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 after the strong collapse even though traders are taking some profit. Hourly support is given at 1236 (12/12/2017 low). Resistance is located at 1326 (04/01/2018).

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's bullish momentum is far fom over despite strong consolidation phase. The technical structure has shown a tremendous positive short-term momentum so far. Hourly support area located around 10775 (22/12/2017 low). In the short-term, the technical structure suggests further bearish momentum. Expected to show further decline.

In the long-term, the digital currency has had an exponential growth. There are decent likelihood that the asset will reach $40'000 in 2018.

EUR/CHF is trading slightly higher. Hourly resistance is given at 1.1778 (25/12/2017 high). Expected to show continued short-term increase.

In the longer term, the technical structure has reversed. Strong resistance is given at 1.20 (level before the unpeg). Yet, the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on 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 at 0.8689 (08/12/2017 low) and resistance is located at 0.9046 (14/09/2017 high). Expected to show further sideways trading.

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

AUD/USD's upside pressures are growing. Hourly resistance given at a distance at 0.7897 (13/10/2017 high). Support stands at 0.7638 (15/12/2017 low). 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 is skewed to the downside after the pair failed to break hourly resistance at 1.2917 (27/10/2017 high). The pair keeps on heading lower.

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

USD/CHF is trading slightly higher. Yet, the technical structure indicates that further weakness are possible. Expected to show further short-term downside moves

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.