11 Dec: Gbp collapses as Brexit vote is delayed. Australian Business Confidence coming up. UK Jobs/US PPI later

By | December 11, 2018

 

It has been a busy start to the week, with Sterling leading the charge in heading to a 20 month low after the UK PM, May, postponed the parliamentary vote on Brexit. In realising she had no chance of winning, she has gone for buying time in the hope of eventually getting her deal passed although this currently looks to have little chance of success – and it seems as though Cable could head a lot lower yet. Elsewhere in the FX markets, the early Asian weakness in the US$ has been largely reversed in a choppy session, with the Euro being dragged down by Sterling, while the Aud and kiwi are also down, in line with the negative risk sentiment seen in the stockmarkets. US$Jpy is a bit higher although the Chf is finding some safe haven demand from those wishing to exit Sterling.

At the time of writing, the US stock markets are flat to +0.5%, after having recovered from an early selloff, with the DJI and the S+P both down around 0.25%, while in the commodities complex, Gold is down around 0.4% and WTI is also lower, by 3.7%, just a day after rallying on the cuts promised by Saudi Arabia and its allies but pressured by the trade and global growth outlook. It remains above 50.00 but for how long remains to be seen.

In terms of data, the EU Sentix Investor Confidence dropped sharply to -0.3 in December, down from 8.8 and missed expectation of 8.4, the fourth decline in a row, and lowest reading since December 2014. The Expectation index also dropped to -18.8, lowest since August 2012. Sentix noted that “the dynamics of the downturn are similar to those of the pre-crisis year 2007.

Looking ahead, the session will kick off with the NZ Electronic Card Retail Sales, the Australian NAB Business Conditions/Confidence and Q3 House Price Index (exp -1.5%). Europe will look to the UK Jobs data (exp 4.1%, Claimant Count +13.2K, Employment Change +25K) and the ZEW while the US will focus on the PPI (exp 0.00%mm, 2.6%yy) and the API Weekly Crude Oil Stock Inventory.

Economic data highlights will include:

Tue: NZ Electronic Card Retail Sales, Monthly Inflation Gauge, Australian House Price Index, NAB Business Conditions/Confidence, China New Loans, UK Unemployment , German/EU ZEW Economic Sentiment Survey, US PPI,

CURRENCIES
EURUSD: 1.1351
Res  1.1370  1.1390  1.1415
Sup  1.1340  1.1320  1.1305
USDJPY: 113.22
Res  113.45  113.85  114.20
Sup  112.90  112.60  112.25
GBPUSD: 1.2546
Res  1.2570  1.2605  1.2635
Sup  1.2505  1.2485  1.2460
USDCHF: 0.9901
Res  0.9925  0.9960  1.0000
Sup  0.9865  0.9825  0.9785
AUDUSD: 0.7184
Res  0.7195  0.7210  0.7225
Sup  0.7175  0.7160  0.7145
NZDUSD: 0.6871
Res  0.6880  0.6900  0.6920
Sup  0.6855  0.6835  0.6815
INDICES / COMMODITIES
S&P.fs: 2627
Res  2645  2665  2685
Sup  2615  2605  2590
DJ30.fs: 24337
Res  24505  24660.00  24810
Sup  24210  24085.00  23895
SPI200.fs: 5568
Res  5590  5625  5655
Sup  5545  5520  5485
XAUUSD: 1242
Res  1245  1250  1255
Sup  1240  1235  1230
XAGUSD: 14.49
Res  14.60  14.70  14.80
Sup  14.45  14.30  14.15
WTI.fs: 51.02
Res  51.70  52.50  53.20
Sup  50.60  50.00  49.40