Market Brief
The Russian Central bank raised its key rate from 10.5% to 17% effective from today amid USD/RUB spiked to fresh-all-time high of 64.2614. USD/RUB gap opened at 62.4661 and aggressively bounced verse USD. The sentiment remains RUB-negative as crude continues its slide. The WTI contracts tests $55. Some think that the Fed needs to take into account the sizeable oil slide at its two days meeting starting from today.
The Asian equity markets were mostly sold on weakening oil concerns: Nikkei wrote-off 2.01%, Shanghai's Composite lost 1.15%, Jakarta Composite, Sensex and Kospi retreated 1.66%, 1.30% and 0.85% respectively, as traders move toward a risk-off mood before the FOMC decision (due Wed). The Shanghai’s Composite has been the only winner overnight, added 2.31%.
The Japanese news agency Nikkei said Japan considers 2.5% corporate rate cut. USD/JPY and JPY crosses were sluggish in Tokyo. USD/JPY retreated to 117.13. We see room for deeper downside correction given the strengthening bear momentum. Bids are seen pre-117.00 from long-horizon investors. More support is eyed at 115.46/50 (Nov 17th low / Fib 61.8% on Oct-Dec rally). EUR/JPY attacks the daily Ichimoku baseline (146.18) with next support zone placed at 143.81/145.00 (Fib 61.8% on Oct-Dec rally / optionality).
The RBA minutes reiterated bank’s intention of stable rates, talked down the Aussie. AUD/USD rebounded from 0.8200 for the second consecutive day. Option bets take over the market below 0.82 at the second half of the week. We expect the AUD/USD to continue its steady slide toward 80 cents.
GBP/USD cleared 1.57 support on broad based USD strength yesterday. The UK releases November inflation figures today. The headline CPI is expected to ease from 1.3% to 1.2% on year to November, the core CPI is seen stable at 1.5%. Given that further CPI deterioration on sliding oil prices is mostly priced in, we do not expect a sizeable price action on soft read. We keep our bearish bias on GBP verse USD as given the strict tone on the fiscal leg, the BoE has little room for surprisingly hawkish move.
EUR/USD consolidates below 1.25 resistance. Trend and momentum indicators are marginally positive, while traders remain seller on rallies. Resistance is seen at 1.2536/1.2600 (50-dma / Nov 19th high). EUR/GBP barriers are seen at 0.7945/75 for today expiry.
Today, Riksbank gives policy verdict. Traders are focused on EU27 November New Car Registrations, French, German and Euro-zone December (Prelim) Manufacturing, Services and Composite PMIs, Italian and Euro-zone October Trade Balance, UK November CPI, PPI and RPI m/m & y/y, ZEW Survey for German Current Situation and Expectations in December, ZEW Survey for Euro-zone Expectations in December, Canadian October International Securities Transactions and Manufacturing Sales, US November Housing Starts and Building Permits m/m, US December (Prelim) Manufacturing PMI.
| Today's Calendar | Estimates | Previous | Country / GMT |
|---|---|---|---|
| EC Nov EU27 New Car Registrations | - | 6.50% | EUR / 07:00 |
| FR Dec P Markit France Manufacturing PMI | 48.6 | 48.4 | EUR / 08:00 |
| FR Dec P Markit France Services PMI | 48.5 | 47.9 | EUR / 08:00 |
| FR Dec P Markit France Composite PMI | 48.3 | 47.9 | EUR / 08:00 |
| Riksbank Interest Rate | 0.00% | 0.00% | SEK / 08:30 |
| GE Dec P Markit/BME Germany Manufacturing PMI | 50.3 | 49.5 | EUR / 08:30 |
| GE Dec P Markit Germany Services PMI | 52.5 | 52.1 | EUR / 08:30 |
| GE Dec P Markit/BME Germany Composite PMI | 52.3 | 51.7 | EUR / 08:30 |
| IT Oct Trade Balance Total | - | 2014M | EUR / 09:00 |
| IT Oct Trade Balance EU | - | 480M | EUR / 09:00 |
| EC Dec P Markit Eurozone Services PMI | 51.5 | 51.1 | EUR / 09:00 |
| EC Dec P Markit Eurozone Composite PMI | 51.5 | 51.1 | EUR / 09:00 |
| EC Dec P Markit Eurozone Manufacturing PMI | 50.5 | 50.1 | EUR / 09:00 |
| UK Nov CPI MoM | 0.00% | 0.10% | GBP / 09:30 |
| UK Nov CPI YoY | 1.20% | 1.30% | GBP / 09:30 |
| UK Nov CPI Core YoY | 1.50% | 1.50% | GBP / 09:30 |
| UK Nov Retail Price Index | 257.7 | 257.7 | GBP / 09:30 |
| UK Nov RPI MoM | 0.00% | 0.00% | GBP / 09:30 |
| UK Nov RPI YoY | 2.20% | 2.30% | GBP / 09:30 |
| UK Nov RPI Ex Mort Int.Payments (YoY) | 2.30% | 2.40% | GBP / 09:30 |
| UK Nov PPI Input NSA MoM | -1.50% | -1.50% | GBP / 09:30 |
| UK Nov PPI Input NSA YoY | -9.20% | -8.40% | GBP / 09:30 |
| UK Nov PPI Output NSA MoM | -0.30% | -0.30% | GBP / 09:30 |
| UK Nov PPI Output NSA YoY | -0.60% | -0.50% | GBP / 09:30 |
| UK Nov PPI Output Core NSA MoM | 0.00% | 0.10% | GBP / 09:30 |
| UK Nov PPI Output Core NSA YoY | 1.00% | 0.90% | GBP / 09:30 |
| UK Oct ONS House Price YoY | 11.40% | 12.10% | GBP / 09:30 |
| GE Dec ZEW Survey Current Situation | 5 | 3.3 | EUR / 10:00 |
| GE Dec ZEW Survey Expectations | 20 | 11.5 | EUR / 10:00 |
| EC Dec ZEW Survey Expectations | - | 11 | EUR / 10:00 |
| EC Oct Trade Balance SA | 18.4B | 17.7B | EUR / 10:00 |
| EC Oct Trade Balance NSA | 21.0B | 18.5B | EUR / 10:00 |
| CA Oct Int'l Securities Transactions | 4.00B | 4.37B | CAD / 13:30 |
| US Nov Housing Starts | 1040K | 1009K | USD / 13:30 |
| CA Oct Manufacturing Sales MoM | -0.30% | 2.10% | CAD / 13:30 |
| US Nov Housing Starts MoM | 3.10% | -2.80% | USD / 13:30 |
| US Nov Building Permits | 1065K | 1080K | USD / 13:30 |
| US Nov Building Permits MoM | -2.50% | 4.80% | USD / 13:30 |
| US Dec P Markit US Manufacturing PMI | 55.3 | 54.8 | USD / 14:45 |
Currency Tech
EURUSD
R 2: 1.2600
R 1: 1.2536
CURRENT: 1.2451
S 1: 1.2360
S 2: 1.2248
GBPUSD
R 2: 1.5826
R 1: 1.5763
CURRENT: 1.5655
S 1: 1.5590
S 2: 1.5542
USDJPY
R 2: 120.20
R 1: 119.10
CURRENT: 117.36
S 1: 117.00
S 2: 115.46
USDCHF
R 2: 0.9839
R 1: 0.9725
CURRENT: 0.9642
S 1: 0.9595
S 2: 0.9531