TradeTheNews.com Staff
TradeTheNews.com
Notes/Observations
- Germany Dec inflation readings steady but near post reunification highs.
- German Factory Orders recorded strong month in November.
- Fed members see a need to lift rates sooner or at a faster pace than many had earlier anticipated. Focus on upcoming payroll data (Fri) and Dec CPI (next Wed).
- Hawkish FOMC minutes spur selling across most asset classes, with equities, commodities and risk currencies all down.
Asia
- China Dec Caixin PMI Services registered its 4th month of expansion (53.1 v 51.9e).
- Australia Dec Final PMI Services: No est v 55.1prelim (confirmed 3rd straight month of expansion).
- Japan Dec Final PMI Services: No est v 51.1 prelim (confirmed 3rd straight month of expansion).
- BOJ offered to buy ¥2.0T in JGBs under repurchase agreements [unscheduled operation and a large cash injection after JGB yields hit the highest level since Nov.
Europe
- PM Johnson said to be under pressure to halt a £12B rise in national insurance as people struggle with rising inflation and energy bills.
- France took over the presidency of the Council of the EU in 2022. President Macron looking to loosen the euro zone’s fiscal rules. Such a move could cause a major clash with conservatives in Germany.
Americas
- FOMC Dec Minutes some participants judged that rates could rise before maximum employment was reached. A less accommodative future stance of policy would likely be warranted and that the Committee should convey a strong commitment to address elevated inflation pressures. Noted that inflation readings had been higher and were more persistent and widespread than previously anticipated.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
Indices [Stoxx600 -1.16% at 488.64, FTSE -0.73% at 7,461.65, DAX -1.17% at 16,081.29, CAC-40 -1.24% at 7,284.59, IBEX-35 -1.09% at 8,695.58, FTSE MIB -1.34% at 27,786.00, SMI -0.88% at 12,792.94, S&P 500 Futures -0.11%].
Market Focal Points/Key Themes: European indices open lower across the board and slipped further into the red as the session wore on; all sectors trading in the red, but the least worse off are materials and financials; sectors leading to the downside include technology and consumer discretionary; banking subsector supported after reports that Credit Agricole might make offer for Carige; ALG-SocGen JV acquires LeasePlan; M&C Saatchi receives tentative approach from AdvancedAdvT; earnings expected during the upcoming US session include Walgreens-Boots Alliance.
Equities
- Consumer discretionary: Next [NXT.UK] -1% (trading update; raised outlook), Dr. Martens [DOCS.UK] -10% (placement), Greggs [GRG.UK] -1.5% (trading update; new CEO), Sodexo Alliance [DW.FR] -1% (sales).
- Consumer staples: B&M European Value Retail [BME.UK] +1% (trading update).
- Technology: Team17 [TM17.UK] +4% (trading update; acquisitions).
Speakers
- Fitch affirmed New Zealand foreign currency sovereign rating at AA.
Currencies/Fixed income
- USD was steady in the session against the major pairs after the FOMC Dec Minutes on Wed highlighted that members saw a need to lift rates sooner or at a faster pace than many had earlier anticipated. The March FOMC now a live meeting.
- EUR/USD steady at 1.13 area as various EU inflation data remained elevated by stabilizing for the time being.
- GBP/USD drifting back to the lower part of the 1.35 handle as the pair gave up some of its recent gains as risk appetite deteriorated.
- Monetary policy tightening course remained a key driver for bond markets with global yields continuing to move higher. German 10-year yield at -0.07% (**Note: The German 10-year Bund was last positive back in Apr 2019).
Economic data
- (DE) Germany Dec CPI North Rhine Westphalia M/M: +0.5 v -0.3% prior; Y/Y: 5.2% v 5.1% prior.
- (DE) Germany Nov Factory Orders M/M: 3.7% v 2.2%e; Y/Y: +1.3% v -1.1%e.
- (HU) Hungary Nov PPI M/M: 2.7% v 4.5% prior; Y/Y: 21.6% v 18.3% prior.
- (TW) Taiwan Dec CPI Y/Y: 2.6% v 2.7%e; CPI Core Y/Y: 1.8% v 1.6%e; WPI Y/Y: 12.3% v 13.4%e.
- (BR) Brazil Dec FIPE CPI (Sao Paulo) M/M: No est v 0.7% prior.
- (HU) Hungary Central Bank left the One Week Deposit Rate unchanged at 4.00% (1st pause in 8 weeks).
- (DE) Germany Dec Construction PMI: 48.2 v 47.9 prior.
- (DE) Germany Dec CPI Brandenburg M/M: +0.6% v -0.2% prior; Y/Y: 5.7% v 5.7% prior.
- (DE) Germany Dec CPI Hesse M/M: +0.7% v -0.2% prior; Y/Y: 5.4% v 5.3% prior.
- (UK) Dec New Car Registrations Y/Y: -18.2% v 1.7% prior.
- (UK) Dec Final Services PMI: 53.6 v 53.2 prelim (confirms 10th month of expansion); Composite PMI: 53.6 v 53.2 prelim.
- (UK) Dec Official Reserves Changes: +$0.3B v -$1.4B prior.
- (DE) Germany Dec CPI Saxony M/M: +0.5% v -0.2% prior; Y/Y: 5.1% v 5.0% prior.
- (EU) Euro Zone Nov PPI M/M: 1.8% v 1.5%e; Y/Y: 23.7% v 23.2%e.
Fixed income issuance
- (FR) France Debt Agency (AFT) sold total €10.997B vs. €10.0-11.0B indicated range in 2032, 2040 and 2053 Bonds.
- Sold €5.870B in 0.00% May 2032 Oat; Avg Yield: 0.30% v 0.16% prior; Bid-to-cover: 2.12x v 1.78x prior.
- Sold €1.796B in 0.50% May 2040 Oat; Avg Yield: 0.69% v 0.62% prior; bid-to-cover:2.29 x v 2.33x prior.
- Sold €3.331B in 0.75% May 2053 Oat; Avg Yield: 0.99% v 0.83% prior; bid-to-cover: 1.57x v 2.56x prior.
Looking ahead
- (DE) Germany Dec CPI Bavaria M/M: No est v -0.2% prior; Y/Y: No est v 5.3% prior.
- (DE) Germany Dec CPI Baden Wuerttemberg M/M: No est v -0.1% prior; Y/Y: No est v 4.9% prior.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills.
- 06:00 (BR) Brazil Dec FGV Inflation IGP-DI M/M: 1.6%e v -0.6% prior; Y/Y: 18.1%e v 17.2% prior.
- 06:45 (US) Daily Libor Fixing.
- 07:00 (MX) Mexico Nov Leading Indicators M/M: No est v -0.08 prior.
- 07:00 (BR) Brazil Nov Industrial Production M/M: +0.1%e v -0.6% prior; Y/Y: -4.1%e v -7.8% prior.
- 07:30 (US) Dec Challenger Job Cuts: No est v -14.9K prior; Y/Y: No est v -77.0% prior.
- 08:00 (DE) Germany Dec Preliminary CPI M/M: +0.4%e v -0.2% prior; Y/Y: 5.1%e v 5.2% prior.
- 08:00 (DE) Germany Dec Preliminary CPI EU Harmonized M/M: +0.2%e v 0.3% prior; Y/Y: 5.6%e v 6.0% prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Nov Trade Balance: -$80.9Be v -$67.1B prior.
- 08:30 (US) Initial Jobless Claims: 195Ke v 198.0K prior; Continuing Claims: 1.68Me v 1.716M prior.
- 08:30 (CA) Canada Nov Int'l Merchandise Trade (CAD): 2.0Be v 2.1B prior.
- 08:30 (US) Weekly USDA Net Export Sales.
- 10:00 (US) Dec ISM Services Index: 67.0e v 69.1 prior.
- 10:00 (US) Nov Factory Orders: 1.5%e v 1.0% prior; Factory Orders (ex-transportation): 1.1%e v 1.6% prior.
- 10:00 (US) Nov Final Durable Goods Orders: No est v 2.5% prelim; Durables (ex-transportation): No est v 0.8% prelim; Capital Goods Orders (non-defense/ex-aircraft): No est v -0.1% prelim; Capital Goods Shipments (non-defense/ex-aircraft): No est v 0.3% prelim.
- 10:00 (MX) Mexico Central Bank (Banxico) Dec Minutes.
- 10:30 (US) Weekly EIA Natural Gas Inventories.
- 14:00 (AR) Argentina Nov Industrial Production Y/Y: No est v 4.3% prior; Construction Activity Y/Y: No est v 8.3% prior.
- 18:00 (PE) Peru Central Bank (BCRP) Interest Rate Decision; Expected to raise Reference Rate by 50bps to 3.00%.
- 18:30 (JP) Japan Dec Tokyo CPI Y/Y: 0.7%e v 0.5% prior; CPI (ex-fresh food) Y/Y: 0.5%e v 0.3% prior; CPI (ex-fresh food/energy) Y/Y: -0.3%e v -0.4% prior (revised from -0.3%).
- 18:30 (JP) Japan Nov Labor Cash Earnings Y/Y: 0.5%e v 0.2% prior; Real Cash Earnings Y/Y: -0.5%e v -0.7% prior.
- 18:30 (JP) Japan Nov Household Spending Y/Y: +1.2%e v -0.6% prior.
- 20:00 (PH) Philippines Nov Unemployment Rate: No est v 7.4% prior.
- 22:00 (ID) Indonesia Dec Foreign Reserves: No est v $145.9B prior.
- 22:30 (JP) Japan to sell 3-Month Bills.
- 22:35 (JP) Japan to sell 30-Year JGB Bonds.
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.
Recommended Content
Editors’ Picks
AUD/USD trades modestly flat above 0.6400 after Aussie trade data
AUD/USD reacts little to better-than-expected Australian Goods Trade Balance data and remains in a range above 0.6400 early Thursday. Rising bets for an early RBA rate cut cap the Aussie's upside amid China's economic woes and US-Sino trade war fears. Eyes turn to US data, Fedspeak.
USD/JPY fades the dovish BoJ commentary-led uptick above 150.50
USD/JPY is reversing the bounce to near 150.70 in the Asian session on Thursday. The pair remains weighed down by rising bets for another BoJ rate hike this month, shrugging off the dovish comments from BoJ policymaker Nakamura and a modest recovery in the US Treasury bond yields.
Gold price lacks firm near-term direction and is stuck in a familiar range
Gold price extends its sideways consolidative price move in a familiar range, awaiting a fresh catalyst before the next leg of a directional move. Geopolitical tensions, trade war fears and the overnight decline in the US bond yields offer support to the safe-haven XAU/USD.
Ripple's XRP could see a price rebound despite retail activity decline, RLUSD launch delay
XRP traded near $2.4 on Wednesday as Ripple Labs clarified that its RLUSD stablecoin will not debut on exchanges despite a rumored launch among crypto community members. Amid a sharp decline in XRP's price, on-chain data shows the remittance-based token still has the potential to resume its rally.
Four out of G10
In most cases, the G10 central bank stories for December are starting to converge on a single outcome. Here is the state of play: Fed: My interpretation of Waller’s speech this week is that his prior probability for a December cut was around 75% before the data.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.