Morning Brew December 19 2023

Good Morning

Markets are and were fairly calm, consolidating last weeks sharp moves – most busy is the yen where the central bank left rates unchanged as expected. The Yen lost app 80 pips against the US Dollar to now trade at 144

Ten Year Yields are at 3.92, little changed from yesterday and the USD Index is a little higher, mainly due to the weak Jen. EURUSD holds at 1.0935 and GBPUSD 1.2670. Gold and Silver are at 2025 and 23.80 -  if the two metals want to end in line with the historically strong December, they need to start their rise soon or they will run out of time.

Equities remained friendly with gains of app 0.5%, volumes were in line with the averages and the stock of the day was United States Steel after Nippon Steel is looking to buuy the US Rival. The shares rose 26%.

Risings risks of transport in the red sea boosted oil yesterday, this morning the US announced a joint task force to patrol the Red Sea. This carries a significant event risk – Oil traded a 4.5 USD Range yesterday to currently trade at 72230 in the US Line.

Today  the calendar holds the EU inflation US Housing Starts and the Canadian CPI, remain cautious on news and changes in the middle east and already year end adjustments as we have less then two weeks to trade.

Remember to look at forwards to avoid expensive rolls over the year end. You find them in the top of the FX trade window. Do not hesitate to contact us with questions.

I would like to point out Kims great technical summary:

In Yesterday’s Technical Update: https://www.home.saxo/content/articles/technical-analysis/cramers-corner-daily-technical-update-18122023

• S&P 500 Bullish no resist until 4,818 but short-term correction.
• Nasdaq 100. Likely to be testing 16,755, expect minor correction
• DAX top and reversal. Expect correction, support at 16,528
• AEX25 rejected at 795
• BEL20 above resistance at 3,728 but expect correction
• CAC40 looks toppish
• SMI20 failed to close above resistance at 11,245
• Time 5.18
• EURUSD rejected at 1.10 strong resistance
• GBPUSD back below 1.2735. Direction unclear
• USDJPY spiked below support at 141.70 but closed above expect rebound
• EURJPY lower but above key support at 153, resistance at 157.70
• AUDJPY bouncing from rising trendline. Resistance at 96.10
• Dollar Index touched support 101.62
• Time 9.38
• Gold resuming uptrend potential to 2,070 but struggling    
• Silver resumed uptrend
• Platinum confirmed uptrend potential to 1,000
• Copper resumed uptrend
• Brent support at 72, testing resistance at 77.24
• Crude oil support 67, resistance 72.65
• US 10-year T-yields support at 3.83. Possible rebound to 4%

Erik

Key Events:

Tuesday
- Data: EU HICP, US Housing Starts, Canada CPI, Japan Rate Decision

Wednesday
- Data Japan Trade, China Rate decision, UK CPI, EU & US consumer confidences

Thursday
- Data: Turkey Rate decision, US GDP, Canada Retail Sales

Friday
- Data Japan CPI, US Core PCE, US Durable Goods orders, University of Michigan