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Daily Market Outlook, December 5, 2022
Hang Seng & The Chinese Yuan Buoyant On Covid Restrictions Easing
Further indications of curbing of Covid restriction policies in China supported Asian equity markets overnight, with the Hang Seng surging 9%, the Chinese Yuan was also a stand-out performer pressuring the Dollar to print two-and-a-half-month highs. CFTC data continues to suggest a lightening of positioning in the dollar as the Euro and Sterling remain preferred by investors for now.
For the week ahead markets will continue to eye the China headlines for further signs of an easing in restrictions, on the data front we have a relatively quiet slate, highlights include US ISM services and European retail sales released today, central bank meetings for Canada and Australia, with both monetary policymakers set to raise rates again, for the remainder of the week markets will eye US producer price inflation data released Friday, ahead of next week's all-important CPI release. FOMC policymakers will monitor this data for further indication of moderation in goods and services inflation. US GDP data is expected to remain positive in Q4 and today's ISM release should confirm that view, other US data on tap this week includes the trade balance and Fridays University consumer sentiment. In the Eurozone Q3 GDP, out Wednesday is expected to come in at 0.2% quarter over quarter, retail sales and German factory orders are expected to remain impacted by energy prices in the region. In the UK focus will be on survey data with today's services PMI is expected to confirm the 'flash' estimate with a second consecutive month of contraction. The BRC will release its 'unofficial' figures for November, which will give the first signs of consumer appetite as we head into the festive shopping period.
Overnight Headlines
Chinese Cities Ease Curbs But Full Zero-Covid Exit Seen Some Way Off
China’s Services Sector Contracts At Fastest Pace Since May
China Steps On Washington’s Toes As Xi Heads To Saudi Arabia
China PBoC To Reduce OMOs To Avoid Liquidity Excess - Sec. Journal
Pentagon Warns China On Asia-Pacific: US Will Keep War-Fighting Edge
Japan's Service-Sector Activity Growth Hits 3-Month Low -PMI
German, French Central Bankers Say Inflation Will Return To Goal
UK Faces Recession and Lost Decade Without Growth Plan, CBI Says
BoE's Dhingra: UK Rates Should Peak Below 4.5% To Avoid Deep Recession
Offshore Yuan Rises Past 7-Per-Dollar On China Reopening Shift
Bankman-Fried Says He Will Testify Before U.S. House Committee
Global Debt Extends Best Run Since Pre-Covid On China, Fed Bets
Oil Rises As China Loosens Curbs And OPEC+ Keeps Output Steady
Russia Mulls Banning Oil Supplies Subject To Western Price Cap
China Stocks Gain As Easing Of Covid Curbs Buoys Markets
Bargains Begin Luring Big Banks Back To China Bets For 2023
Credit Suisse’s Investment Bank Spin-Out Attracts Saudi Crown Prince
Technical & Trade Views
SP500 Bias: Bullish Above Bearish Below 4000
Technicals
Primary support is 4000
Primary upside objective is 4120
Next pattern confirmation, acceptance above 4100
Failure below 3975 opens a test of 3930
20 Day VWAP bullish, 5 Day VWAP bullish
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EURUSD Bias: Bullish Above Bearish below 1.04
Technicals
Primary support is 1.05
Primary upside objective is 1.0620
Next pattern confirmation, acceptance above 1.0550
Failure below 1.04 opens a test of 1.0350
20 Day VWAP bullish, 5 Day VWAP bullish
Today’s New York Cut Option Expiries: 1.0300 (560M), 1.0445-50 (1.02BN), 1.0500 (728M), 1.0570-75 (1.04BN)
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GBPUSD Bias: Bullish Above Bearish below 1.21
Technicals
Primary support is 1.21
Primary upside objective 1.24
Next pattern confirmation, acceptance above 1.2250
Failure below 1.20 opens a test of 1.1930
20 Day VWAP bullish, 5 Day VWAP bullish
Today’s New York Cut Option Expiries: 1.2300 (253M)
EUR/GBP: 0.8500 (1.7BN)
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USDJPY Bias: Bullish above Bearish Below 136
Technicals
Primary resistance is 136
Primary downside objective is 132
Next pattern confirmation, acceptance below 133.50
Acceptance above 136.10 opens a test of 137.50
20 Day VWAP bearish, 5 Day VWAP bearish
Today's New York Cut Option Expiries: 134.00 (980M), 135.45 (362M), 136.00 (291M)
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AUDUSD Bias: Bullish Above Bearish below .6700
Technicals
Primary support is .6700
Primary upside objective is .6900
Next pattern confirmation, acceptance above .6800
Failure below .6700 opens a test of .6600
20 Day VWAP bullish, 5 Day VWAP bullish
Today’s New York Cut Option Expiries: N/A
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BTCUSD Bias: Intraday Bullish Above Bearish below 16500
Technicals
Intraday 16500 is primary support
Primary upside objective is 18000
Next pattern confirmation, acceptance below 17200
Failure 16400 opens a test of 16000
20 Day VWAP bearish, 5 Day VWAP bullish
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!