Market Update – December 12 – USD lifts, Stocks Slip Ahead of a Key Week

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 – traes 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, tares 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 Maklem. 

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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