China slows down – risk-off to start the week

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  • USD (Index USD 94.10) holds on to peaks, Weak data from China (T3 GDP 0.2% vs 0.5% & Production ind. 3.1% vs 4.5%) Big hiccups, Risk-Off tone to start the week. Oil continues to advance by testing key techniques – Yields the driver (again) US 10 years at 1.6%. NZD increases – (CPI 2.2% vs. 1.4% & Services PMI (46.9 vs. 35.6) Auckland’s lockdown has been extended.

  • The PBOC breaks the silence on Evergrande – “may contain contagion”: the risks are (1) other real estate companies and (2) a larger economy.

  • American returns (10 years closed at 1.576%) now at 1.60% in Asian trades.

  • Equities rose strongly towards the close. United States500 +33.0 (+ 0.75%) at 4471 (Dow + 1.0%) – Big movers AMZN & MasterCard + 3.3%, TSLA + 3.0% & BAC + 2.8%, FB -1 , 15%, MRNA -2.31%. USA500.F Dips to 4446. Asian stocks drop on China news. VIX closed -2.56% at 5:00 p.m. (8 week low) – now trading at 17.35.

  • American Oil back to test new 7-year highs, is trading at $ 82.75.

  • Gold slipped to higher yields at $ 1,763 now from Thursday’s $ 1,800 test.

  • Foreign exchange markets USD remains long – EURUSD 1.1573 cable holds 1.3720 (Bailey ‘will have to act’ to curb inflation) and USDJPY again up to 114.25.

Coming weekInflation and PMI The data dominate economic outputs, Earnings highlights include: Johnson & Johnson, Procter & Gamble, Netflix, (Squid Games will add $ 900 million in revenue?) Verizon, IBM, Intel, You’re here, (Musk joined over 200 VW executives over the weekend) and AT&T.

European Open – The December 10-year Bund futures are down -53 ticks to 169.05, underperforming Treasury futures and pointing to another sharp rise in cash yields early in the session. Bailey’s comments from the BoE, will add to the pressure in the European part of the session. UK money markets are increasingly taking into account a BoE move this year, leaving bond market traders worried about the risks of stagflation. DAX and FTSE 100 Futures are currently down -0.1%.

Today – American industrial production, Fed’s Quarles, BoC’s Lane and BOE Cunliffe.

The Biggest FX Mover @ (06:30 GMT) USDCAD (+ 0.28%) Raised from 1.2335 Friday lows to test 1.2400 now. The faster MAs aligned higher, the MACD signal line and histogram tend up and above the 0 line, RSI 64.00 and moving higher, Stochs. 95 and BO. ATR H1 0.0012, Daily ATR 0.00826.


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