MARKET REPORT
Review:
– Strong US Housing Starts
– Bostic reaffirms cautious view
– Barkin hesitant to give details on cuts
– Red Sea transit disruptions continue
– BoJ maintained policy settings & forward guidance
– Hotter-than-expected Canadian CPI
– Lufthansa orders up to 100 airplanes from BA
– Dollar down. AUD 67.60 +0.85% EUR 91.04 -0.55% GPB 12731+0.65% JPY 143.77 +0.7%
– Gold up $2053 +0.65%
– DOW up 0.6% 37910, ES up 0.5% 4817, ND up 0.5% 17020
– Crypto: BTC flat, ETH down 1.5%
– Crude +1.5% $73.60
Upcoming:
– UK CPI, PPI, EZ Consumer Confidence (Flash),
– US Consumer Confidence
– PBoC LPR,
– BoC Minutes (Dec)
Speakers: ECB’s Lane; Fed’s Goolsbee
MAJORS:
DX:
Fridays Core PCE is the last scheduled event this year.
The Dollar continued its post Powell decline, with despite the contention among Fed Governors, the Greenback is listening to Powel and the Dollars decline continues.
Volumes should thin and volatility should die down with PCE this Friday, public Holidays Monday for Christmas and later NY we are entering the Holiday season slowdown.
101.75 -0.4%. Appears we’ll meander on downwards, with 101 on the cards pre Fri.
AUD:
Further Dollar weakness see’s the AUD the strongest on the board. Expect we’ll see 68 again pre PCE. 66.75-68.50 Would be ranges Id trade, looking for further AUD strength.
EUR:
EUR at 91 flat. Can see muddled trade around here, cant see a break of 90.50 pre PCE, but dollar weaker is across the board, excluding Yen. 90.42-91.72 pre PCE.
Pound Pound:
I expected a little more weakness in the Pound. I got this one wrong. Pound at 127.30.
No call here.
Yen:
The distinct FX laggard, seeing USD/JPY hit a high of 144.95, just failing to breach 145.00 before paring somewhat as stateside trade got underway, with the Yen weighed on after the BoJ meeting and following Ueda comments. To recap, BoJ unanimously left its rate and YCC unchanged, whilst forward guidance was also maintained with Ueda later adding there is little chance for BoJ to say policy will change in January. The cross is entering the APAC Wednesday session around 144, well off the earlier highs. Citi’s FX desk commented earlier on, “with holiday/year-end markets in full swing, thin liquidity conditions exacerbated the move overnight and we are seeing limited follow-through.”
Yen report courtesy of Newsquark.
Gold and Silver:
Gold higher on Dollar weakness.
Expecting a breakout in the New Year. Dollar does not want to go up. Bodes well for Gold.
Silver at 24.35 is relatively cheap. Should see $25.
Equities:
– DOW 0.63% at 37914
– ES 0.52% at 4817
– NQ 0.49% at 17022
– DAX +0.56% at 16,744.41
– FTSE 100 +0.31% at 7,638.03
– CAC 40 +0.08% at 7,574.67
– Euro Stoxx 50 +0.32% at 4,535.55
US Sectors:
Energy +1.22%, Communication Services +0.92%, Materials +0.91%, Financials +0.77%, Industrials +0.73%, Real Estate +0.7%, Consumer Discretionary +0.7%, Health +0.67%, Utilities +0.56%, Technology +0.24%, Consumer Staples +0.22%.
Boeing +1.2%: Deutsche Lufthansa (LHA GY) purchased 40 Boeing 737-8 MAX plus 60 options.
Tesla +2%: Intends to raise hourly pay by 10% or more for Nevada Gigafactory workers in January to potentially deter union interest and collective bargaining efforts among its workforce.
Oil:
Oil prices were firmer again on Tuesday amid continued Red Sea transit disruptions and a softer Dollar. WTI and Brent had initially extended their paring lower from late on Monday into the Tuesday session, hitting session troughs of USD 72.14/bbl and 77.41/bbl, respectively, in the London morning. However, better buying resurfaced into stateside trade, finding some risk premium baking in after shipping Co. Euronav said it would avoid the Red Sea until there were convoys to protect ships. The upside was gradual from there, and also found tailwinds from the softening Dollar, to see WTI and Brent peak at USD 74.44/bbl and 79.67/bbl at midday in NY. We also heard from a Maersk executive in a CNBC interview who said that the US’ Red Sea task force is to take a few weeks to get going and that the shipping major won’t commit to a time to returning to transit. The exec said the long-run impacts will be minimal and absorbed but short-run effects will be greater. Elsewhere Tuesday, RIA reported Russian Deputy PM Novak saying there was no need for immediate action from OPEC+ given oil prices have increased and the market is being balanced. Traders are now looking to the weekly US energy inventory data, with the private release due later on Tuesday ahead of the EIA figures on Wednesday. Current expectations (bbls): Crude -2.3mln, Gasoline +1.2mln, Distillates +0.5mln.
Oil report courtesy of zerohedge.com
Bond Yields:
1 Mo: 5.351 -0.008 6Mo 5.341 -0.013 1yr 4.941 -0.038 5yr 3.938 -0.012 10yr 3.931 -0.025 and the 30yr 4.04 -0.029
2’s/10’s -0.51
Crytpo:
Flat day for BTC coming off early strength at 43250 to close 42250. Still like upward momentum.
ETH 2250 to 2150 settled at 2175. Anything sub 2150 I like for a move upward.
Best of luck out there. Let the market come to you.
We do our best to provide correct information and pricing. We do not accept liability on for error. All pricing listed has been taken care and checked but no liability assumed in error.
As ALWAYS, any advice given is general in nature and is not suited to each traders individual: situation/time-frame/goals/financial circumstance/risk profile/loss mechanics etc
We offer ideas for trades from time to time, we accept no liability for results, they are to be traded on your discretion and responsibility.
I can be contacted should anyone have any questions, input at [email protected] during US hours of EST 9am until 5pm
