Daily Market Outlook, December 6, 2022

Daily Market Outlook, December 6, 2022 Robust US Econ Data Supports US Yields & The Dollar, Weighing On Risk Sentiment…Overnight Asian equity markets were subdued, as Wall Street saw further weakness driven by a rebound in US bond yields which provided support for the Dollar, the reversal in risk sentiment was driven by another set of strong economic data out of the US, this led markets to reprice hopes for the Fed to reduce the overall terminal rate for rate increases, dashing hopes for an early end to the rate cycle, with many investors now betting on another hawkish outcome form next week’s FOMC meeting. The Reserve Bank of Australia raised rates overnight by another 25bps, as expected, in its subsequent statement, the central bank reiterated that inflation remains too high but that medium-term expectations remain well anchored. For the day ahead, the data calendar is pretty sparse, focus in the UK will be on construction PMI data, which will give an update on the very interest rate-sensitive sector, ahead of next week’s Bank of England meeting, the October construction PMI saw it biggest rise in five months, with commercial building lead the way, this was offset by a distinctly weak reading for housing activity, which saw its fourth month of decline, market watchers expect the November data to show another overall increase, however, the issue is likely to be that growth expectations overall will be somewhat more sanguine, suggesting the current uptick in overall activity will likely fizzle out.  In the US markets await trade balance data later today, October international trade data suggests another meaningful rise in the overall trade deficit is likely, as US imports continue to rise rapidly, while exports continue to stagnate, this suggests a further decline in competitiveness as the strong greenback weighs on demand for US exports, underpinned by slower global growth environment, leaving exporters handicapped. Markets-wise, investors will be watching for any follow-through in the reversal in risk sentiment, especially a continuation of firmer US yields which will likely weigh on equity markets, the benchmark SP500 is testing some key support in the 3970/80 area a continued absence of buyers here could put hopes for a Santa Claus rally in further jeopardy!Overnight HeadlinesChina Reports Fewer Covid Cases As Blanket Testing Rules EasedAustralia Raises Key Rate, Reiterates Further Tightening To ComeAustralia Records First Current Account Deficit In Three YearsJapan Oct Real Wages Post Biggest Fall In 7 Years With Hot InflationJapan’s Households Spend More Despite Falling Real WagesBoJ Gov Kuroda Rules Out Rate Hike Until Wages Rise MoreFitch: World Growth Forecasts Cut Again As Inflation Fight IntensifiesECB’s Lane Confident Inflation Near Peak As More Hikes To ComeUK’s Soaring Inflation Rate Erodes Jump In Shop Sales, BRC SaysDollar Holds Firm On Hawkish Fed Bets, Aussie Tad Higher After RBAChina’s Local Credit Market Weakens Further On Fund OutflowsOil Snaps Two-Day Drop With China Demand And Russia Cap In FocusUS, EU Mull Climate-Based Tariffs Aimed At China Steel, AluminiumAsia-Pacific Markets Mixed; Beijing Eases Some Covid MeasuresPorsche Will Join Germany’s Blue-Chip Index – Deutsche BoersePepsiCo To Lay Off Hundreds Of Workers In Headquarters RolesChevron Set To Take Control Of Venezuela Oil Facility This WeekTechnical & Trade ViewsSP500 Bias: Bullish Above Bearish Below 3990TechnicalsPrimary support is 3990Primary upside objective is 4120Next pattern confirmation, acceptance above 4050Failure below 3975 opens a test of 393020 Day VWAP bullish, 5 Day VWAP bearishEURUSD Bias: Bullish Above Bearish below 1.0450TechnicalsPrimary support is 1.0450Primary upside objective is 1.0620Next pattern confirmation, acceptance above 1.0550Failure below 1.04 opens a test of 1.035020 Day VWAP bullish, 5 Day VWAP bullishToday’s New York Cut Option Expiries: 1.0325 (214M), 1.0410-15 (252M)1.0425-35 (876M), 1.0550 (787M), 1.0575 (240M)GBPUSD Bias: Bullish Above Bearish below 1.21TechnicalsPrimary support is 1.21Primary upside objective 1.24Next pattern confirmation, acceptance above 1.2250Failure below 1.20 opens a test of 1.193020 Day VWAP bullish, 5 Day VWAP bullishToday’s New York Cut Option Expiries: EUR/GBP: 0.8550 (450M)USDJPY Bias: Bullish above Bearish Below 136TechnicalsPrimary resistance is 137.50Primary downside objective is 132Next pattern confirmation, acceptance below 133.50Acceptance above 138 opens a test of 139.3020 Day VWAP bearish, 5 Day VWAP bullishToday’s New York Cut Option Expiries: 139.50 (370M), 140.00 (1.71BLN)AUDUSD Bias: Bullish Above Bearish below .6640TechnicalsPrimary support is .6640Primary upside objective is .6900Next pattern confirmation, acceptance above .6800Failure below .6600 opens a test of .655020 Day VWAP bullish, 5 Day VWAP bearishToday’s New York Cut Option Expiries: 0.6700 (410M), 0.6750 (292M), 0.6800 (593M) 0.6820 (327M). NZD/USD: 0.6370 (527M)USD/CAD: 1.3615-25 (1.04BLN), 1.3660 (310M)BTCUSD Bias: Intraday Bullish Above Bearish below 16500TechnicalsIntraday 16500 is primary supportPrimary upside objective is 18000Next pattern confirmation, acceptance below 17200Failure 16400 opens a test of 1600020 Day VWAP bearish, 5 Day VWAP bullish



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