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Canada will announce its inflation data for the month of October at 13:30 GMT on Wednesday. It is possible that the data will indicate that inflation has continued to accelerate, which would strengthen the case for an earlier rate hike and support the Canadian currency versus the greenback, helping it bounce back from the one-month low that was posted in the previous week.

Annual CPI is forecast to tick higher

The projection for the monthly CPI is for it to rise to 0.7% in October from 0.2% in the prior month. The annual inflation rate is predicted to tick up to 4.7% versus 4.4% before, holding well above the 2.0% midpoint target. As a result of supply chain concerns and low base year impacts, the inflation rate has risen to its highest level since February 2003.

Will BoC get closer to raising rates?

As the economy recovers, Bank of Canada Governor Tiff Macklem said the central bank is “getting closer” to raising interest rates, in accordance with previous forward guidance. Also, his team has its eyes on its inflation target despite rising risks related to price pressures.

The BoC hinted last month that its first-rate hike might come as soon as April 2022, while money markets are betting on a boost in March and a total of five rate hikes during next year. Quantitative easing was ended in October and replaced with reinvestment in Canadian bonds, a process that will continue through the end of the year. Canadian economic growth has been revised downward from 5.1% this year to 4.25% in 2022 and 3.75% in 2023. Inflationary pressures, notably rising energy prices and supply bottlenecks due to the pandemic, appear to be larger and more permanent than predicted. By the end of 2022, CPI inflation is expected to fall back to the 2% target level.

Technical View: Dollar/loonie shows some improvement

Turning to FX markets, dollar/loonie has been gaining some ground over today’s session, remaining above the simple moving averages (SMAs). If the numbers beat expectations, they could strengthen the Canadian currency, pushing the dollar/loonie pair lower towards 1.2390 and then the 1.2285 support reached on October 20.

On the flip side, disappointing CPI figures could see the pair re-challenge the resistance around the 1.2600 psychological number ahead of the 1.2770 barrier.

Notes/Observations

• No breakthroughs from US-China virtual meeting.
• Germany suspends certification process for Nord Stream 2; energy prices spike higher.
• UK jobs data seen as likely enough to seal the deal for a potential Dec BoE rate hike.
• RBA Minutes continued to show central bank pushback against market pricing for a 2022 rate hikes.
• Awaiting for US retail sales data for more clarity regarding Fed interest rate outlook.

Asia

• China stated that President Xi and US President Biden had full and deep communication on development and bilateral issues, Stressed that US should take responsible macroeconomic policies. Told US to watch for spillover effect from macro policy; President Biden had indicated that the US did not support Taiwan independence.
• RBA Nov Minutes reiterated stance to remain committed to maintaining highly supportive monetary conditions to achieve a return to full employment in Australia and inflation consistent with the target. A further pick-up in inflation was expected but added global inflationary forces were seen moderating over next 18 months.
• RBA Gov Lowe stated that had yet to see broad based pick up in wages and needed wages to grow 3.0% or more to hit CPI midpoint. Reiterated its forward guidance that the 1st rate increase was not likely before 2024. Current situation did not warrant rate hike in 2022; Economy would have to turn out very different for board to consider hike next year.
• Japan Fin Min Suzuki stated that expected the domestic economy to pick up during Q4; Stimulus to have real impact in 2022.
• BOJ is revisiting scheme aimed at revitalizing regional banks and sought to avoid excessive payouts to banks.

Europe

• France Fin Min Le Maire said to want to advance the discussion on an overhaul of euro-area debt rules during its EU council presidency in the first half of next year.

Americas

• President Biden signed the $1.1T infrastructure bill on Monday, Nov 15th (as expected).
• White House stated that President Biden discussed complex nature of bilateral relations, US remained committed to "One China" policy, but opposed to efforts to change status of Taiwan; Pressed Xi to fulfill Phase 1 trade commitments.
• Fed's Barkin (FOMC voter, hawk) stated that did not think the infrastructure bill would provide any near term stimulus. Expected supply chain issues to last well into 2022.
• Fed's Kashkari (dove, non-voter) stated that Fed would never allow price expectations to become unanchored. Paying close attention to the data and added that higher prices were real but the key was not to over-react.
• US Senate Banking Chair: President Biden pick for Fed Chair is imminent.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

• Indices [Stoxx600 +0.23% at 489.56, FTSE -0.05% at 7,348.40, DAX +0.32% at 16,199.60, CAC-40 +0.27% at 7,148.02, IBEX-35 -0.28% at 9,070.38, FTSE MIB +0.07% at 27,889.00, SMI +0.13% at 12,533.72, S&P 500 Futures -0.03%].
• Market Focal Points/Key Themes: European indices open generally higher and traded broadly sideways as the session wore on; among better performing sectors are financials and industrials; while to the downside we find materials and consumer discretionary sectors; Danone divests Aqua d’Or to Royal Unibrew; Stagecoach and Next disclose due diligence is ongoing; earnings expected during the upcoming US session includes Home Depot, Nasdaq and Walmart.

Equities

• Consumer discretionary: Homeserve [HSV.UK] +3% (earnings).
• Consumer staples: Imperial Brands [IMB.UK] -1.5% (earnings).
• Healthcare: Molecular Partners [MOLN.CH] -29% (trial results).
• Industrials: Diageo [DGE.UK] +2.5% (mid-term targets).
• Telecom: Vodafone [VOD.UK] +5% (earnings; raises outlook), Bouygues SA [EN.FR] -2% (earnings).

Speakers

• Sweden Central Bank (Riksbank) Dep Gov Breman expressed confidence that inflation would fall back after reaching its expected peak.
• Poland Central Bank's Gatner stated that CPI would continue rising in the upcoming 2-3 months. Says he would vote for two rate hikes of 50bps each at the upcoming two MPC meeting (Dec and Jan).
• German regulator said to temporarily suspended Nord Stream 2 pipeline certification process. Consortium had planned to just form a German subsidiary within the territory and this was not sufficient. Suspension to last until such time that the operating company arranged German company status compliant with national law.
• German VCI (Chemical Industry Association) Q3 Production +0.8% q/q; prices +2.9% q/q due to logistics, raw material and energy costs.
• China Communist Party resolution vowed to achieve national reunification. To maintain Hong Kong and Macau prosperity.
• Russia Dep PM Novak stated that was too early to predict what the OPEC+ decision would be at the upcoming Dec monthly meeting:
• Nigerian National Petroleum Corporation (NNPC): $100 oil is within sight.
• OPEC Sec Gen Barkindo stated that saw oversupply in market in 2022; had signals that OPEC needs to be careful. OPEC+ wants to make sure the global economy did not falter.
• IEA Monthly Oil Report (OMR) maintained its 2021 global oil demand growth at 5.5M bpd while raising the 2022 global oil demand growth from 3.3M bpd to 3.4M bpd.

Currencies/Fixed Income

• USD maintained its form tone after hitting fresh 16-month highs during the Asian session. Greenback strength has been aided by anticipate faster monetary-policy tightening by the Fed and reinforced by recent US economic data. Dealers also noted that the protracted Covid-19 wave in Europe providing greater demand for safe havens.
• EUR/USD probing 1.1350 area in the session as ECB officials continued to tout that tightening monetary policy at this time to rein in inflation could choke off the eurozone's recovery.
• GBP/USD higher at 1.3460 after Sept ILO Jobless data seen as likely enough to seal the deal for a Dec BoE rate hike. Some dealers point out that BOE rarely acts boldly or hastily when raising rates and rarely even does in Dec when year-end liquidity and participant dry up.
• Other central bank continue to pushback against market pricing for a 2022 rate hikes (RBA, ECB being the most recent over the past day).

Economic data

• (NO) Norway Q4 Consumer Confidence: 13.7 v 11.0 prior.
• (FI) Finland Sept GDP Indicator Y/Y: 5.0% v 4.3% prior.
• (UK) Q3 Preliminary Output Per Hour Y/Y: -4.8% v +4.3% prior.
• (UK) Oct Jobless Claims Change: -14.9K v -85.9K prior; Claimant Count Rate: 5.1%v 5.2% prior.
• (UK) Sept Average Weekly Earnings 3M/Y: 5.8% v 5.6%e; Weekly Earnings (ex-bonus) 3M/Y: 4.9% v 5.0%e.
• (UK) Sept ILO Unemployment Rate: 4.3% v 4.4%e; Employment Change 3M/3M: +247K v +190Ke.
• (RO) Romania Q3 Advance GDP Q/Q: 0.3% v 0.9%e; Y/Y: 7.2% v 9.7%e.
• (FR) France Final CPI M/M: 0.4% v 0.4% prelim; Y/Y: 2.6% v 2.6% prelim; CPI (ex-tobacco) Index: 106.42 v 106.42e.
• (FR) France Final CPI EU harmonized M/M: 0.4% v 0.5% prelim; Y/Y: 3.2% v 3.2% prelim.
• (CZ) Czech Oct PPI Industrial M/M: 1.9% v 0.8%e; Y/Y: 11.6% v 10.3%e.
• (HU) Hungary Q3 Preliminary GDP Q/Q: 0.7% v 1.0%e; Y/Y: 6.1% v 7.3%e.
• (HK) Hong Kong Oct Unemployment Rate: 4.3% v 4.4%e.
• (NL) Netherlands Q3 Preliminary GDP Q/Q: 1.9% v 1.6%e; Y/Y: 5.0% v 3.7%e.
• (NL) Netherlands Sept Consumer Spending Y/Y: 4.6% v 3.1% prior.
• (NE) Netherlands Sept Trade Balance: €5.3B v €4.4B prior.
• (IT) Italy Oct Final CPI M/M: 0.7% v 0.6% prelim; Y/Y: 3.0% v 2.9% prelim.
• (IT) Italy Oct Final CPI EU Harmonized M/M: 0.9% v 0.8% prelim; Y/Y: 3.2% v 3.1% prelim.
• (EU) Euro Zone Q3 Preliminary GDP (2nd reading) Q/Q: 2.2% v 2.2%e; Y/Y: 3.7% v 3.7%e.
• (EU) Euro Zone Q3 Preliminary Employment Q/Q: 0.9% v 0.7% prior; Y/Y: 2.0% v 1.9% prior.

Fixed income Issuance

• (ZA) South Africa sold total ZAR3.9B vs. ZAR3.9B indicated in 2030, 2032 and 2035 bonds.
• (ES) Spain Debt Agency (Tesoro) sold total €1.895B vs. €1.5-2.5B indicated range in 3-month and 9-month bills.
• (UK) DMO sold £1.75B in 0.875% Jan 2046 Gilts; Avg Yield: 1.178% v 0.940% prior; bid-to-cover: 2.03x v 2.38x prior; Tail: 1.0bps v 0.2bps prior.

Looking Ahead

• 05:25 (EU) Daily ECB Liquidity Stats.
• 05:30 (HU) Hungary Debt Agency (AKK) to sell HUF15B in 3-Month Bills.
• 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).
• 06:00 (IL) Israel Q3 Advance GDP Annualized: 4.1%e v 16.6% prior.
• 06:00 (BR) Brazil Nov FGV Inflation IGP-10 M/M: +1.6%e v -0.3% prior.
• 06:00 (FI) Finland to sell combined €1.0B in 2031 and 2047 RFGB Bonds.
• 06:25 (BR) Brazil Central Bank Weekly Economists Survey.
• 06:30 (EU) ESM to sell €1.5B in 6-month Bills.
• 06:45 (US) Daily Libor Fixing.
• 07:00 (BR) Brazil Sept Economic Activity Index (Monthly GDP) M/M: -0.3%e v -0.2% prior; Y/Y: 1.8%e v 4.7% prior.
• 08:00 (HU) Hungary Central Bank (MNB) Interest Rate Decision: Expected to raise Base Rate by 30bps to 2.10%.
• 08:00 (PL) Poland Oct CPI Core M/M: 0.7%e v 0.7% prior; Y/Y: 4.5%e v 4.2% prior.
• 08:00 (UK) Daily Baltic Dry Bulk Index.
• 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).
• 08:15 (CA) Canada Oct Annualized Housing Starts: 255.0Ke v 251.2K prior.
• 08:30 (US) Oct Advance Retail Sales M/M: 1.3%e v 0.7% prior; Retail Sales (ex-auto) M/M: 1.0%e v 0.8% prior; Retail Sales (ex-auto/energy): 0.7%e v 0.7% prior; Retail Sales (Control Group): 0.9%e v 0.8% prior.
• 08:30 (US) Oct Import Price Index M/M: 1.0%e v 0.4% prior; Y/Y: 10.2%e v 9.2% prior; Import Price Index (ex-petroleum) M/M: 0.3%e v 0.1% prior.
• 08:30 (US) Oct Export Price Index M/M: 1.0%e v 0.1% prior; Y/Y: No est 16.3% prior.
• 08:55 (US) Weekly Redbook LFL Sales data.
• 09:00 (EU) Weekly ECB Forex Reserves.
• 09:00 (HU) HU) Hungary Central Bank (MNB) Gov post rate decision statement.
• 09:00 (EU) ECB weekly QE bond buying update.
• 09:15 (US) Oct Industrial Production M/M: +0.8%e v -1.3% prior; Capacity Utilization: 75.9%e v 75.2% prior; Manufacturing Production: +0.8%e v -0.7% prior.
• 09:45 (UK) BOE to buy £1.47B in APF Gilt purchase operation (20+ years).
• 10:00 (US) Nov NAHB Housing Market Index: 80e v 80 prior.
• 10:00 (US) Sept Business Inventories: 0.6%e v 0.6% prior.
• 10:00 (CO) Colombia Sept Trade Balance: -$1.6Be v -$1.6B prior; Total Imports: $5.6Be v $5.4B prior.
• 11:00 (CO) Colombia Q3 GDP Q/Q: +5.0%e v -2.4% prior; Y/Y: 12.5%e v 17.65 prior.
• 11:00 (CO) Colombia Sept Economic Activity Index (Monthly GDP) Y/Y: 11.2%e v 13.2% prior.
• 11:00 (EU) ECB chief Lagarde.
• 12:00 (US) Fed’s Barkin, Bostic and George at event.
• 13:00 (CA) Bank of Canada (BOC) Schembri.
• 15:30 (US) Fed's Daly at Commonwealth Club.
• 16:00 (US) Sept Total Net TIC Flows: No est v $91.0B prior; Net Long-term TIC Flows: No est v $79.3B prior.
• 16:30 (US) Weekly API Oil Inventories.
• 16:45 (NZ) New Zealand Q3 PPI Input Q/Q: No est v 3.0% prior; PPI Output Q/Q: No est v 2.6% prior.
• 18:30 (AU) Australia Oct Leading Index M/M: No est v -0.02% prior.
• 18:50 (JP) Japan Oct Trade Balance: -¥350Be v -¥624.1B prior (revised from -¥622.8B); Adjusted Trade Balance: -¥609.2Be v -¥624.8B prior; Exports Y/Y: 10.5%e v 13.0% prior; Y/Y: 31.9%e v 38.6% prior.
• 18:50 (JP) Japan Sept Core Machine Orders M/M: +1.5%e -2.4% prior; Y/Y: 17.7%e v 17.0% prior.
• 19:30 (AU) Australia Q3 Wage Price Index Q/Q: 0.6%e v 0.4% prior; Y/Y: 2.2%e v 1.7% prior.
• 19:30 (SG) Singapore Oct Non-oil Domestic Exports M/M: 0.6%e v 1.2% prior; Y/Y: 18.0%e v 12.3% prior; Electronic Exports Y/Y: No est v 14.4% prior.
• 20:10 (JP) BOJ Outright Bond Purchase Operation for 1~3 Years; 5~10 Years and 25 Years~ maturities.
• 20:20 (EU) ECB Lagarde at event.
• 20:30 (KR) Bank of Korea (BOK) to sell KRW1.0T in 3-Year Bonds.
• 21:35 (CN) China to sell 1-year and 10-year Bonds.
• 22:00 (TH) Thailand Finance Ministry to sell THB17B in 2042 Bonds.

EURCHF is struggling to gain positive traction, as its 50-day simple moving average (SMA) has crossed below the 200-day SMA completing a ‘death cross’, increasing fears of a sustained bearish outlook.

The bearish outlook and the recent price depreciation are mostly supported by the short-term momentum indicators, as the RSI is hovering above its oversold region. However, the MACD is found below zero but above its red signal line, which indicates that the negative momentum might be fading.

Should the price drop below its 1.0494 support, the selling pressure could intensify, sending the price to test its July 2015 low of 1.0404. A further descending movement from this crucial point could strengthen the pair’s negative momentum, paving the way towards the April 2015 low of 1.0230.

On the flip side, if the price breaks above the 1.0531 level, the bulls may then target the 1.0603 barrier. Surpassing that level could pave the way towards the 1.0655 resistance, before testing the 50-day SMA, currently found at 1.0709. Surpassing the latter could turn the cards around for the pair, changing its outlook to neutral.

In brief, the overall outlook of the EURCHF is negative. However, this might change if the price breaks above the 50-day SMA, while breaking below the July 2015 low could strengthen the pair’s negative momentum.

• Inflation worries lift Treasury yields, holding back stocks; retailer earnings in focus
• Little to report from Biden-Xi summit but easing tensions boost yuan
• Euro and pound pulled in opposite directions by policymakers, dollar holds firm

It’s still all about inflation

Uncertainty about the persistence of higher inflation continues to dog investor sentiment amid ongoing speculation about the timing of interest rate hikes by the world’s major central banks. A stronger-than-expected jump in the New York Fed’s manufacturing gauge on Monday was the latest data point to highlight long-lasting supply disruptions and rising costs, giving Treasury yields a nudge up.

The 10-year Treasury yield climbed back above 1.60% to the highest in three weeks, helping the US dollar to stretch its latest winning streak.

However, the breach of the 1.60% level proved somewhat painful for stocks on Wall Street, cutting short the rebound from last week’s dip. The S&P 500 ended the session flat and e-mini futures were marginally lower at the start of European trading.

Equity markets look a bit adrift on Tuesday but there should be some direction later from the latest retail sales numbers out of the United States. Retailers will also be in focus on the earnings front as Walmart and Home Depot are due to report their Q3 results before the US market open.

China and US make progress, Fed nomination eyed

Overall, the mood is slightly risk-on, helped by easing tensions between Washington and Beijing. The much anticipated virtual meeting between President Biden and Xi Jinping ended late on Monday without much to show for other than the pledge for more cooperation.

However, hopes for reduced hostilities and better trade ties were enough to lift the Chinese yuan to 5½-month highs against the dollar.

Nevertheless, stocks are struggling to maintain the recent strong upward momentum and they may not be able to do so until there is more clarity on the monetary policy front. Although the Fed has so far given no indication that it is anywhere close to considering a faster pace of tapering, it has kept the door open to the possibility.

Several Fed policymakers will be making appearances today, including Richmond Fed President Barkin, San Francisco Fed chief Daly, and the Atlanta Fed’s Bostic. Their remarks will be closely watched for any fresh takes on the inflation outlook.

The Fed has a good record of letting the markets know in advance of any forthcoming shifts in policy so the risks for an immediate change are low. However, there is the added uncertainty about Jerome Powell’s future as Chair of the Fed as President Biden has yet to renominate him. An announcement is thought to be imminent. Should Biden instead decide to promote Governor Brainard who’s a strong contender and considered to be slightly more dovish than Powell, there could be a bit of a pullback in both yields and the dollar.

Pound, euro and aussie jolted by policymakers

The policy paths of the Bank of England, European Central Bank and the Reserve Bank of Australia are also in the spotlight, spurring some volatility in the currency markets.

The euro took a fresh dive on Monday, slumping to a 16-month low of $1.1354, after President Lagarde reiterated that a rate hike in 2022 was “very unlikely”, warning that it could hurt the Eurozone recovery.

The Australian dollar also came under pressure earlier today, easing to around $0.7340, after RBA Governor Philip Lowe told investors that “the latest data and forecasts do not warrant an increase in the cash rate in 2022”. With no sign of a substantial pickup in wages – a key criteria for the RBA, a rate increase should be seen as some way off. However, markets are still not convinced and expect policy tightening to begin next year, hence, why the aussie slipped only marginally.

The Bank of England on the other hand is once again talking up rate hike expectations, with Governor Bailey telling lawmakers yesterday that he was “very uneasy” about the inflation situation. His comments confirm that December is very much a live meeting and the odds for a hike have moved up to more than 60%.

The pound is surging on the back of Bailey’s remarks and is today’s best performer, rising by 0.3% against the greenback and 0.4% versus the euro.

The dollar index, meanwhile, scaled fresh 16-month highs yesterday and is currently holding near those peaks today.

EURJPY has traced the lower Bollinger band, extending the retreat in the pair from the 133.47 peak, which has pushed the price below the simple moving averages (SMAs) and towards the 129.61 level that is the 50.0% Fibonacci retracement of the up leg from 125.08 until the near 40-month peak of 134.12. The converged SMAs are not endorsing any definitive direction in the pair.

The short-term oscillators are also transmitting mixed signals in directional impetus. The MACD has distanced itself below its red trigger line and is falling deeper beneath the zero mark, while the RSI is starting to improve in the bearish territory. The stochastic lines are entangled in the oversold region and the %K line has yet to signal any waning in negative forces.

In the negative scenario, the 50.0% Fibo of 129.61 could continue to limit the decline from gaining pace. However, if selling powers overwhelm, the support base from the 61.8% Fibo of 128.54 until the near seven-month low of 127.92 may come into focus. Should this key boundary fail to dismiss negative tendencies, the bears could then dive for the 76.4% Fibo of 127.21.

Otherwise, if buyers build positive traction off the 50.0% Fibo of 129.61, they could encounter an initial tough zone of resistance from the 100-day SMA at 130.16 until the 38.2% Fibo of 130.66. Successfully overcoming these barriers, the price may meet the mid-Bollinger band around the 131.42 obstacle before jumping towards the 23.6% Fibo at 132.00. Gaining more ground, the bulls could then target the nearby 132.55 and 132.91 highs respectively before challenging the upper Bollinger band at 133.18.

In conclusion, EURJPY retains a bearish tone below the SMAs and the 132.55 high. A push beneath the 50.0% fibo at 129.61 could revive negative pressures, while a break above the 131.42 barrier could begin to nourish bullish powers.

Yesterday, the US stock market closed with a slight decline when the dollar index hit a 16-month high. Investors are buying the USD because of a sharp rise in US inflation. This rise confuted the Federal Reserve's view that price pressures would be temporary and strengthened speculation that interest rates would be raised earlier than previously expected. The University of Michigan reported late last week that the Consumer Confidence Index fell to its lowest level in a decade in November (to 66.8 points from 71.7 points a month earlier). This came as a surprise to analysts who had expected an increase to 72.4 points. The Dow Jones and Nasdaq indices decreased by 0.04% yesterday, while the Standard&Poor's 500 closed near where it had opened.

According to a Washington Post and ABC poll, a majority of US citizens (70%) were negative about the current state of the US economy.

In contrast to US indices, European stock indices increased yesterday, with some indices breaking price records. The Stoxx Europe 600, a composite index of the largest companies in the region, gained 0.35% and hit a new record. Since the beginning of the current year the index has grown by more than 22%. Germany's DAX jumped by 0.34% and hit a new high, France's CAC 40 added 0.5% and also hit its new high, Britain's FTSE 100 increased by 0.05%. At the same time, Italy's FTSE MIB added 0.5% and Spain's IBEX increased by 0.2%. Deutsche Bank is calling on the ECB to tighten its monetary policy as inflation rises. Tomorrow new data on the consumer price index in Europe will be published. The growth in inflation may be a reason for the ECB to consider reducing its bond-buying program at the next ECB meeting.

Despite the rise in disease across Europe, the UK is not going to introduce restrictions at the moment. Several cases of the new Covid-19 strain have been detected in France, raising concerns amid increasing cases of infectious disease across Europe.

British Prime Minister Boris Johnson said yesterday that the Russian pipeline to Europe represents a threat to stability and added that Europe will soon face the choice of buying Russian hydrocarbons or protecting Ukraine, a matter of peace and stability.

The UK Antitrust Authority intends to conduct an in-depth investigation into Nvidia's planned $40 billion acquisition of ARM Holdings.

Airbus says it can't increase A350 production fast enough to meet demand and predicts supply constraints for another 3 years.

Oman's oil minister expects OPEC+ to extend its decision to increase production by 400,000 bpd in December. The US Senator Schumer calls for using strategic oil reserves to lower prices. However, OPEC+ representatives believe that such a move would not significantly reduce prices.

The price of gas in Europe jumped to $961 after the failure of Gazprom on gas transit reservation for December through Poland.

Yesterday, Asian stocks hit a two-week high as investors welcomed a video meeting between US President Joe Biden and Chinese leader Xi Jinping that helped push the Chinese yuan to a five-month high. MSCI Asia-Pacific's broadest stock index outside Japan increased by 0.27%, to its highest level since Oct. 27, while Tokyo's Nikkei index added 0.4%. Today Asia-Pacific stock indices are trading flat, with Hong Kong's Hang Seng showing strong gains.

Industrial production in China has grown by 10.9% from the beginning of the year. Unemployment did not rise in China in October, 11.33 million jobs have been created since January. China's economy has maintained a steady recovery in October.

Chinese authorities have suspended the issuance of licenses for new video games amid restrictions on playing time for children and controls on game content. The last permit was issued in July 2021.

The S&P/ASX 200 index in Australia fell by 0.67% after the Reserve Bank of Australia governor spoke out against calls for a rate hike next year. Released on Tuesday, minutes of the central bank of Australia's November monetary policy meeting showed that the RBA expected the rate to remain unchanged until 2024.

Main market quotes:

• S&P 500 (F) 4,682.80 −0.050 (−0.001%)
• Dow Jones 36,087.45 −12.86 (−0.04%)
• DAX 16,148.64 +54.57 (+0.34%)
• FTSE 100 7,351.86 +3.95 (+0.054%)
• USD Index 95.51 +0.38 (+0.40%)

Important events for today:

• Australia RBA Meeting Minutes at 02:30 (GMT+2);
• Australia RBA Governor Philip Lowe’s Speech at 04:30 (GMT+2);
• UK Average Earnings Index (m/m) at 09:00 (GMT+2);
• UK Claimant Count Change (m/m) at 09:00 (GMT+2);
• UK Unemployment Rate (m/m) at 09:00 (GMT+2);
• Eurozone GDP (q/q) at 12:00 (GMT+2);
• US Retail Sales (m/m) at 15:30 (GMT+2);
• US Industrial Production (m/m) at 16:15 (GMT+2);
• ECB President Lagarde’s Speech at 18:10 (GMT+2);
• US FOMC Member Barkin speaks at 19:00 (GMT+2).

According to flash estimate, Eurozone GDP grew 2.2% qoq in Q3, 3.7% yoy. Employment grew 0.9% qoq, 2.0% yoy.

EU GDP grew 2.1% qoq, 3.9% yoy. Employment grew 0.9% qoq, 2.1% yoy.

Full release here.

The Dax 40 climbed after upbeat retail sales and industrial production in China lifted market sentiment.

The index is seeking to consolidate its recent gains after it cleared the previous peak at 15990 which has now turned into support. Sentiment remains optimistic and 16300 would be the next step.

An overbought RSI on the daily chart may temporarily put the brakes on the bullish fever. But a pullback may once again attract a ‘buying-the-dips’ crowd above 15990. A deeper correction may send the price towards 15770.

The Australian dollar softened after the RBA minutes reiterated that there will be no rate hike until 2024.

The pair has found buying interest at the base of October’s bullish breakout (0.7280). A break above the falling channel indicates that sentiment could be turning around.

0.7390 is a key resistance and its breach could prompt sellers to bail out. In turn, this would raise volatility in the process. Traders may then switch sides in anticipation of a reversal. An overbought RSI has so far limited the upside impetus.

Gold continues on its way up as investors seek to hedge against inflationary pressures. The rally picked up steam after a break above the triple top at 1833. Price action is grinding up along a rising trendline.

The bulls are pushing towards 1884, a major resistance where last June’s sell-off started. Strong selling pressure is possible in that supply zone as short-term buyers may take profit and reassess the directional bias.

1855 on the trendline is the first support. A bearish breakout may trigger a correction to 1823.