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Reflective Markets as the New Year Nears

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Fundamental analysis of Forex market

Notes/Observations

  • Happy New Year!!!! Hopefully 2020 will provide perfect vision in your trading
  • EU session very quiet as participants avoid fresh positions

Asia:

  • South Korea Dec CPI M/M: 0.2% v 0.1%e; Y/Y: 0.7% v 0.6%e ; Overall 2019 Avg CPI of 0.4% at the slowest pace since 1966
  • South Korea Jan Business Manufacturing Survey: 73 v 71 prior (highest level since July 2019); Non-Manufacturing Survey: 75 v 74 prior (highest level since Sept 2018)
  • China Dec Manufacturing PMI registered its 2nd straight month of expansion (50.2 v 50.1e)
  • China National Business Work Conference to focus on promoting stable consumption growth in 2020 (Note: 2019 consumption see +8% y/y and drive more than 60% of economic output)

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 0.00% at 416.18, FTSE -0.38% at 7,558.23, DAX -0.66% at 13,249.01, CAC-40 -0.08% at 5,977.50, IBEX-35 -0.65% at 9,550.00, FTSE MIB -1.06% at 23,506.37, SMI 0.00% at 10,616.94, S&P 500 Futures +0.06%]

Market Focal Points/Key Themes:

Equities

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  • Consumer discretionary: Bango [BGO.UK] -10% (trading and strategy update)
  • Healthcare: Hvivo [HVO.UK] -4% (offer update)

Speakers

  • India Fin Min Sitharaman: To unveil a national infrastructure pipeline; to coordinate mechanism for projects. PM task force to recommend INR102T in projects
  • Hong Kong Secretary for Development Wong: To sell three residential land sites in the coming quarter via tender
  • Singapore PM Lee New Year’s Eve address noted that the domestic economy was growing less vigorously than we would like but the country did avoid a recession
  • China Foreign Ministry spokesperson Geng Shuang: No comment on Vice Premier Lui He travel plans (**Reminder: on Dec 30th reports circulated that China Vice Premier Liu He would lead the trade delegation to US on Saturday, Jan 4th for signing of the 1st phase of US-China trade agreement)

Currencies/ Fixed Income

  • USD maintained its sift tone against the major pairs into year-end. The technical picture for the greenback hinting that an extended phase of weakness appeared to be in the making.
  • USD/JPY testing 3-week lows below the 108.65 level. Downside momentuim likely to garner pace below the 108.50 area and could retest the 105 pivotal support in coming weeks.
  • GBP/USD was higher for the 6th straight session to approach the 1.3150 area. The pair was up almost 7% for the quarter as the post-election recovery continued due to more clarity on the upcoming Brexit as the Jan 31st 2020 date was now within sights.
    EUR/USD ending 2019 above the 1.12 handle.

Economic Data

  • (ZA) South Africa Nov M3 Money Supply Y/Y: 7.4% v 7.5%e; Private Sector Credit Y/Y: 6.6% v 7.4%e
  • (RU) Dec Russia PMI Services: 53.1 v 55.0e (6th month of expansion); PMI Composite: 51.8 v 52.9 prior
  • (TR) Turkey Nov Trade Balance: -$2.2B v -$2.1Be
  • (FI) Finland Oct final Trade Balance: €0.0B v €0.0B prelim
  • (RU) Russia Narrow Money Supply w/e Dec 27th (RUB): 11.07T v 10.84T prior
  • (CZ) Czech M2 Money Supply Y/Y: 7.6% v 8.1% prior
  • (GR) Greece Oct Retail Sales Value Y/Y: 7.1% v 5.0% prior; Retail Sales Volume Y/Y: 6.6% v 4.4% prior

Fixed Income Issuance

Looking Ahead

  • (IT) Bank of Italy 3Q Credit Conditions and Risk
  • (PT) Portugal Dec CPI M/M: No est v -0.1% prior; Y/Y: No est v 0.3% prior
  • (PT) Portugal Dec CPI EU Harmonized M/M: No est v -0.7% prior; Y/Y: No est v 0.2% prior
  • (RU) Russia Dec Preliminary CPI M/M: 0.4%e v 0.3% prior; Y/Y: 3.1%e v 3.5% prior
  • (RU) Russia Dec Preliminary CPI Core M/M: No est v 0.2% prior; Y/Y: No est v 3.5% prior
  • 05:30 (UK) Weekly John Lewis LFL Sales data
  • 06:00 (IL) Israel Q3 Preliminary GDP Annualized: 3.2%e v 4.1% prior
  • 07:00 (CL) Chile Nov Manufacturing Production Y/Y: -5.0%e v -5.8% prior; Industrial Production Y/Y: -4.1%e v -3.4% prior; Total Copper Production: No est v 494.0K tons
  • 07:00 (CL) Chile Nov Unemployment Rate: 7.6%e v 7.0% prior
  • 07:45 (US) Goldman Economist Chain Store Sales
  • 08:00 (RU) Russia Q3 Final Current Account Balance: No est v 12.9K prior
  • 08:55 (US) Weekly Redbook LFL Sales data
  • 09:00 (US) Oct FHFA House Price Index M/M: 0.4%e v 0.6% prior
  • 09:00 (US) Oct S&P Case-Shiller (20-City) M/M: 0.30%e v 0.36% prior; Y/Y: 2.10%e v 2.10% prior; NSA Index: 218.29e v 218.27 prior
  • 09:00 (US) Oct S&P Case-Shiller (overall) House Price Index (HPI) Y/Y: No est v 3.22% prior; HPI NSA Index: No est v 212.2 prior
  • 09:00 (EU) Weekly ECB Forex Reserves
  • 10:00 (MX) Mexico Nov Net Outstanding Loans (MXN): No est v 4.641T prior
  • 10:00 (MX) Mexico Weekly International Reserve data
  • 10:00 (US) Dec Consumer Confidence Index: 128.4e v 125.5 prior
  • 19:00 (KR) South Korea Dec Trade Balance: $3.5Be v $3.4B prior; Exports Y/Y: -8.6%e v -14.3% prior; Imports Y/Y: -6.9%e v -13.0% prior