Market Brief
The Australian jobs data lifted the AUD-complex higher in Sydney. The unemployment rate eased from 6.3% to 6.1% in December, the economy added 41.6K full-time jobs vs. 4.1K part-time jobs lost. The participation rate improved slightly. AUD/USD traded well bid above the 21-dma (0.8138). Trend and momentum indicators hint at further upside correction as the probabilities for a RBA cut in February decline. The key resistance is placed at 0.8343/61 (50-dma / Oct’14-Jan’15 downtrend top). AUD/NZD advances to a month high (1.0641), the strengthening momentum has room for further lift towards 1.08s.
In Japan, the JPY-crosses were better bid amid the corporate good prices fell 0.4% on month to December, pulling the year-on-year PPI down to 1.9% from 2.7% (vs. 2.1% exp.) The BoJ Governor Kuroda said to maintain the expansive policy as long as needed, while there is talk of BoJ considering to extend its lending programs (to expire in March) to sustain inflation. The two lending programs have already been extended in February last year to boost the capex and encourage banks to give out credits to complement the massive BoJ QQE. USD/JPY rebounded from 116.07 yesterday, printing a formation of a hammer: market is attempting to determine a bottom. With trend and momentum indicators biased negative, we continue seeing resistance at daily Ichimoku cloud top (118.75). Option bids trail above 117.50/118.00, offers are seen below 116.75 for today expiry. The key support remains at 115.50/57 (Fibonacci 61.8% on Oct-Dec rally / December dip). EUR/JPY extended weakness to 137.01 on yesterday’s EUR sell-off. Resistance remains solid at 140.26/30 (area including 200-dma &Fib 38.2%).
Released in New York yesterday. the US retail sales dropped 0.9% on month to December (vs. -0.1% exp. & +0.7% last), the retail sales ex-autos contracted 1.0% m/m. The weak data triggered a short-lived USD sell-off. EUR/USD advanced to 1.1846, before decent macro offers sent the pair back below 1.18. EUR/USD traded in the tight range of 1.1760/93 in Asia. The sentiment remains solidly negative as the speculations of a full-blown QE dominates. The ECJ adviser yesterday cleared doubts by stating that the prior OMT program is “in principle” in line with the EU treaty. His words have been perceived as a green light for the QE. Traders remain seller on rallies.
USD/CAD tests 1.20 offers, sold-off from 1.2017 yesterday. Decent option bids are ready to give support at 1.20+ as WTI slides lower (-1.77% on the session so far). USD/NOK remains well bid before the trade data, expected to have deteriorated in December mostly due to weakness in oil prices and certainly majorly priced in. Technicals hint at short-term correction unless we see sizeable deception on trade dara. The MACD is in the red zone, candle patterns print formation of evening star (conviction 5/9).
The economic calendar today: Spanish December (Final) CPI m/m & y/y, Swedish December Average House Prices, German 2014 GDP NSA y/y and Budget Maastricht as % of GDP, Norwegian December Trade Balance, Spanish and Euro-zone November Trade Balance, US January Empire Manufacturing, Us December PPI m/m & y/y, US January 10th Initial Jobless & January 3rd Continuing Claims, Canadian December Existing Home Sales m/m and Philadelphia Fed’s January Business Outlook.
| Today's Calendar | Estimates | Previous | Country / GMT |
|---|---|---|---|
| SP Dec CPI EU Harmonised MoM | -0.60% | -0.20% | EUR / 08:00 |
| SP Dec F CPI EU Harmonised YoY | -1.10% | -1.10% | EUR / 08:00 |
| SP Dec CPI MoM | -0.60% | -0.10% | EUR / 08:00 |
| SP Dec F CPI YoY | -1.10% | -1.10% | EUR / 08:00 |
| SP Dec CPI Core MoM | - | 0.40% | EUR / 08:00 |
| SP Dec CPI Core YoY | -0.10% | -0.10% | EUR / 08:00 |
| GE 2014 GDP NSA YoY | 1.50% | 0.10% | EUR / 09:00 |
| GE 2014 Budget Maastricht % of GDP | 0.10% | 0.10% | EUR / 09:00 |
| NO Dec Trade Balance NOK | - | 24.6B | NOK / 09:00 |
| SP Nov Trade Balance | - | -2240.1M | EUR / 09:00 |
| NO Norges Bank Issues 4Q Lending Survey | - | - | NOK / 09:00 |
| EC Nov Trade Balance SA | 20.0B | 19.4B | EUR / 10:00 |
| EC Nov Trade Balance NSA | - | 24.0B | EUR / 10:00 |
| US Jan Empire Manufacturing | 5 | -3.58 | USD / 13:30 |
| US Dec PPI Ex Food, Energy, Trade MoM | 0.00% | 0.00% | USD / 13:30 |
| US Dec PPI Ex Food, Energy, Trade YoY | - | 1.50% | USD / 13:30 |
| US Dec PPI Final Demand MoM | -0.40% | -0.20% | USD / 13:30 |
| US Dec PPI Ex Food and Energy MoM | 0.10% | 0.00% | USD / 13:30 |
| US Dec PPI Final Demand YoY | 1.00% | 1.40% | USD / 13:30 |
| US Dec PPI Ex Food and Energy YoY | 1.90% | 1.80% | USD / 13:30 |
| US Jan 10th Initial Jobless Claims | 290K | 294K | USD / 13:30 |
| US Jan 3rd Continuing Claims | 2400K | 2452K | USD / 13:30 |
| CA Dec Existing Home Sales MoM | - | 0.00% | CAD / 14:00 |
| US Jan Philadelphia Fed Business Outlook | 18.7 | 24.5 | USD / 15:00 |
Currency Tech
EUR/USD
R 2: 1.2000
R 1: 1.1871
CURRENT: 1.1773
S 1: 1.1727
S 2: 1.1640
GBP/USD
R 2: 1.5485
R 1: 1.5320
CURRENT: 1.5216
S 1: 1.5078
S 2: 1.5000
USD/JPY
R 2: 120.83
R 1: 118.75
CURRENT: 117.75
S 1: 116.07
S 2: 115.50
USD/CHF
R 2: 1.0435
R 1: 1.0278
CURRENT: 1.0201
S 1: 1.0118
S 2: 1.0033