13 Dec: US$ heavy after lower CPI. May wins UK no-confidence vote…for now. ECB/SNB Meetings today

By | December 13, 2018

Stocks have rallied on Wednesday, up by around 1.2%-1.5% as trade tensions eased a little, with sentiment underpinned by a report that Chinese officials are seeking to give foreign companies more access to local markets. Also helping the markets was the US CPI data, which was unchanged from a month earlier, slowing from the 0.3% increase seen in October and suggesting that the Fed will need to slow its path to hike rates in 2019.

 In the currency markets, Sterling was again the centre of attraction and rallied strongly, taking the Euro with it, ahead of the no-confidence vote against Theresa May, which traders thought she would win, which as it turned out was the correct decision although another vote could be called in Parliament by the Labour Party, and with 1/3 of the Tory Part not backing her in today’s vote, she could well lose a parliamentary vote, if it comes about. Elsewhere the FX markets have remained rangebound although the US$ is a little softer on most fronts on the back of the soft US inflation figures. The metals are unchanged while WTI was up by around 0.5% but then fell quite hard late in the day to currently sit down by around 0.3%.

Looking ahead to Thursday, the session will kick off with a busy Australasian session that will include the release of the NZ Food Price Index, Australian Consumer Inflation Expectation, and the quarterly RBA Bulletin, although there is little else to come from Asia. From Europe, the focus is going to be on the EU Brexit summit with the EU unlikely to provide much solace for PM May but expect some extreme volatility in Sterling. Also from the EU we get the German CPI (exp 0.1%mm, 2.3%yy; HICP, exp 2.2%yy) which comes ahead of the Interest Rate Decisions from both the ECB and the SNB although no changes to policy are expected from either although there could well be mention, from Draghi, of winding back QE. Otherwise interest will be in the Statements and in the Press Conferences from Mario Draghi and the SNB’s Jordan. The US will have a pretty empty calendar, with just the weekly Jobless Claims and the Import/Export Index due for release. Have a good day.

Economic data highlights will include:                                      

Thur: NZ Food Price Index, Australian Consumer Inflation Expectation, RBA Bulletin, German CPI/HICP, SNB Interest Rate Decision/Statement, ECB Interest Rate Decision/Statement/ Press Conference, US Import/Export Index

CURRENCIES
EURUSD: 1.1373
Res  1.1400  1.1420  1.1440
Sup  1.1340  1.1305  1.1265
USDJPY: 113.18
Res  113.55  113.80  114.15
Sup  113.00  112.75  112.45
GBPUSD: 1.2654
Res  1.2680  1.2710  1.2740
Sup  1.2620  1.2580  1.2550
USDCHF: 0.9926
Res  0.9955  1.0005  1.0060
Sup  0.9905  0.9860  0.9805
AUDUSD: 0.7214
Res  0.7230  0.7240  0.7250
Sup  0.7205  0.7195  0.7180
NZDUSD: 0.6851
Res  0.6865  0.6890  0.6910
Sup  0.6825  0.6800  0.6770
INDICES / COMMODITIES
S&P.fs: 2668
Res  2685  2700  2715
Sup  2650  2630  2610
DJ30.fs: 24618.00
Res  24715  24850  25000
Sup  24520  24395  24220
SPI200.fs: 5660
Res  5680  5700  5720
Sup  5640  5620  5595
XAUUSD: 1245
Res  1250  1255  1260
Sup  1240  1235  1230
XAGUSD: 14.73
Res  14.80  14.90  15.00
Sup  14.65  14.55  14.45
WTI.fs: 51.23
Res  51.60  52.15  52.80
Sup  50.65  50.05  49.40