- The USD Index holds at 105.00 from lows on Friday at 104.50, following hot PPI data and strong consumer sentiment. Stocks fell into close on Friday (Dow the weakest -0.9%) and down 2.85-4.0% last week (Nasdaq weakest) threatening the Santa Rally. Yields rallied over 2% on Friday, 10yr closed at 3.567% trades at 3.55% today. Asian markets & European FUTS are also lower as Chinese Covid infections rise as restrictions are eased. BIG week ahead.
Week Ahead – US CPI and the FOMC dominate matters but 10 other Central Banks update markets this week including ECB and BOE. 50 bp hike from the FED now at 77% from Fed Funds Futures, following Friday’s data.
- EUR – tested the 1.0600 zone on Friday – trades down at 1.0530 now.
- JPY – rallied from post PPI low at 135.60 on Friday to test 137.00 again today.
- GBP – Sterling rallied again to breach 1.2300, briefly and post 5-month highs on Friday. Trades at 1.2228 now.
- Stocks – Wall Street dived on Friday – US500 -29.13 (-0.73%) 3934, Big movers included LULU -12.85%, COIN -6.00%, & TSLA +3.23%, NFLX +3.14%. FUTS trades at 3933 now too.
- USOil – Slipped to new 12-month+ lows at $70.05 on Friday on a weak global outlook, trades at $71.40 now.
- Gold – Rallied to and broke the key $1800 again, but could not hold it. Trades at $1788 support now.
- BTC – Sentiment woes continue, rallied to $17.3k on Friday but trades below 17k today at 16.9K
Today – UK GDP (m/m) beats (0.5% vs. 0.4%) & better Production data. UK NIESR – Speech from BOC’s Macklem.
Biggest FX Mover @ (07:30 GMT) USDJPY (+0.47%) rallied from post PPI low at 135.60 on Friday to test 137.00 again today. MAs aligning higher, MACD histogram & signal line positive but falling, RSI 58.50 & rising, H1 ATR 0.196, Daily ATR 1.783.
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Stuart Cowell
Head Market Analyst
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