Daily Market Outlook, December 19, 2022

Daily Market Outlook, December 19, 2022 Investors continue to digest last week’s central bank activity, as the Fed, the BoE, and the ECB all raised interest rates and struck a distinctly hawkish tone. Asian equity markets took their lead from a weak close on Wall Street, however, European markets are set to post a rebound this morning, as the macro data calendar begins to wind down, focus is shifting to the potential for a shift in monetary policy in Japan. The Japanese government is suggesting a revision to its decade-old joint statement with the Bank of Japan which focuses on a strict 2% inflation target, this implies the potential for a shift away from the yield curve control strategy, these reports have seen the Japanese yen strengthen overnight. With markets poised to wind down for the festive period, the data calendar for the week ahead is quieter, in the UK the focus will be on Wednesday’s Lloyds Business Barometer, investors will be looking for any nascent signs of improvement in business conditions ahead of Thursday’s Q3 GDP updates, which is expected to deliver an unrevised quarter over quarter contraction of 0.2%. In the Eurozone, today’s German Ifo release is the only data of note, this is expected to show another uptick in sentiment, as investors are hoping that the economic downturn may prove less severe than previously expected. In the US Friday’s personal consumption and expenditure, the Feds preferred inflation metric, is expected to show lower year-over-year levels of inflation for both the headline and core readings, with markets expecting a sub-5 % print for core, ex-food, and energy. Markets-wise, with Friday’s massive options expiration complete investors are hoping for some stability to develop in the week ahead, European bourses are set to open on firmer footing, with a lack of tier-one data catalysts a rebound in risk sentiment may develop, as investors pin their hopes on a Santa rally for the festive period after one of the most bruising years for investors since the great financial crisis of 2008Overnight HeadlinesBiden, House GOP To Start 2023 With Scant Ties, TensionManchin Says No Intentions Of Ditching Democratic PartyChina Hints At Pro-Business Push, Small Fiscal Boost In 2023Chinese Business Confidence At Lowest In Almost A DecadeCovid Outbreak Throws Chinese Factories, Supply Into ChaosReports Japan Government Consider Revising BoJ StatementBank Of Japan To Sit Tight As Markets Weigh Post-Kuroda PathEU Considers Lower Gas-Price Cap In Latest Plan To Limit CrisisPutin’s Belarus Visit Stokes Fears Could Drawn Into Ukraine WarUK Recession Will Last Until The End Of Next Year, Report KPMGOil Advances On China’s Growth Pledge And US Move To Refill SPRApple Scales Back Mac Pro Plans, Weighs Production Move To AsiaFX Options Expiring 10am New York CutEUR/USD: 1.0400 (965M), 1.0620 (252M), 1.0660 (235M)1.0700 (546M)USD/JPY: 135.00 (372M), 135.95-00 (430M)GBP/USD: 1.2395-00 (253M). EUR/GBP: 0.8720 (230M)AUD/USD: 0.6825 (213M), 0.6860 (251M)Technical & Trade ViewsSP500 Bias: Bullish Above Bearish Below 3900Primary support is 3900Primary downside objective is 3700Above 3950 opens a test of 400020 Day VWAP bearish, 5 Day VWAP bearishEURUSD Bias: Bullish Above Bearish below 1.0550Primary support is 1.0590Primary upside objective is 1.07Failure at 1.05 opens a test of 1.0420 Day VWAP bullish, 5 Day VWAP bullishGBPUSD Bias: Bullish Above Bearish below 1.22Primary support is 1.22Primary upside objective 1.24Failure at 1.2180 opens a test of 1.203020 Day VWAP bearish, 5 Day VWAP bearishUSDJPY Bias: Bullish above Bearish Below 137.50Primary resistance is 137.50Primary downside objective is 132Above 138 opens a test of 139.3020 Day VWAP bearish, 5 Day VWAP bearishAUDUSD Bias: Bullish Above Bearish below .6700Primary support is .6700Primary upside objective is .6900Failure at .6700 opens a test of .660020 Day VWAP bu, 5 Day VWAP bearishBTCUSD Bias: Intraday Bullish Above Bearish below 16500Intraday 16500 is primary supportPrimary upside objective is 17200Failure at 16400 opens a test of 1600020 Day VWAP bearish, 5 Day VWAP bearish



Source link