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Daily Market Outlook, December 7, 2022



Daily Market Outlook, December 7, 2022 China Re-opening Fails To Inspire, Trade & Tech Weakness WeighWeakness on Wall Street led by the Nasdaq selling off 2%, as tech names were hit hard, migrated to Asian markets overnight, lacklustre performance in the energy and tech sectors sent the Nikkei lower, with the Shanghai Comp and Hang Seng following suit all down circa 1%. China re-opening buzz was countered with dire trade data from the region, both exports and imports were impacted by Covid, further souring risk sentiment. Stateside, NBC predicts a Democrat win in the Georgia Senate runoff, this gives support to Democrat spending policies in the second half of the Biden administration, markets generally prefer political gridlock, and this projected win added to the pairing of risk appetite for investors, supporting the Dollar & US Yields for a second day.For the day ahead, Eurozone Q3 GDP data is expected to print at 0.2%, investors will parse the report for indications of new growth drivers in the single currency zone, and particular interest will be given to the employment component as investors assess the strength of the employment market across the region. US investors will focus on labour productivity for Q3, market watchers expect upward revisions to lower the rate at which unit labour costs advanced during the quarter, however, the Fed is still likely to deem the rate of increase as to hot and hindering their ability to achieve their inflation target. Across the border in Canada, the central bank is expected to deliver its seventh consecutive rate increase, the only question for markets is the size of the hike, over the last three months they have gradually reduced the rate of rises from 100bps to 50bps at the October meeting, markets are currently pricing at 25bps increase today, although, given continuing strength in domestic employment data, the bank may deliver a 50bps increase. As with the US, investors will be keen to gain a sense of where the bank views the terminal rate for the current cycle, with market watchers sensing that the bank may point to a pause in rate rises as soon as today or by the next meeting in January, with markets expecting a terminal rate of 4.30%, 60bps shy of where the US rate is expected to peak.  Markets-wise GSK is a standout performer this morning, soaring 13% in early trade as a US court has dismissed thousands of claims against the company's heartburn drug, claimant assertions that the drug caused cancer have been rejected. The US benchmark SP500 is teetering on the 3900 level, loss of this support will likely see further liquidation, adding support to bond yields and the Greenback ahead of next week's inflation data and Federal Reserve meetingOvernight HeadlineChina Is Said To Weigh GDP Growth Target Of Around 5% For 2023China To Ease Quarantine, Unnecessary Testing In New MeasuresChinese Exports Hit By Weak Global Demand And Covid DisruptionsChina Says Monetary Policy Should Be ‘Targeted, Forceful’Australia Economy Slows In Q3 As Inflation Saps Spending PowerBoJ’s Nakamura: Need To Continue With Easing PersistentlyJapan Business Mood Up, Global Slowdown Weighs On Outlook -PollRBI Raises Key Rate 35Bps As Expected, Inflation Remains ElevatedEU Steps Up WTO Cases Against China On Patent, Lithuania ActionUS Unemployment Rate Set To Surpass 5.5%, Economists Predict – FTDemocrats Expand Senate Majority After Winning Georgia Run-OffDollar To Rebound, Accumulate Safe-Haven Strength In 2023 – RTRS PollAustralia Front-End Yield Curve Inverted Amid Slowing GrowthOil Edges Up On China Demand Hopes; Russian Uncertainty WeighsRussia Could Ban Oil Sales, Set Maximum Discount In Response To CapAsian Stocks Fall As Growth Concerns Outweigh China OptimismEuropean Tech Groups Lose $400bn In Value Following Funding CrunchFX Options Expiring 10am New York CutEUR/USD: 1.0360-70 (1.07BN), 1.0600 (1.01BN)USD/JPY: 134.00 (920M), 136.15 (270M), 138.00 (435M), 140.00 (411M)EUR/JPY: 142.45 (274M), 147.00 (684M)USD/CHF: 0.9225 (250M), 0.9320 (600M), 0.9425 (420M), 0.9560 (400M)EUR/CHF: 0.9750 (281M)GBP/USD: 1.2050 (398M)EUR/GBP: 0.8650 (324M)AUD/USD: 0.6600 (225M)NZD/USD: 0.6350 (261M), 0.6450 (811M)USD/CAD: 1.3200 (1.3BN), 1.3300 (571M), 1.3395 (200M), 1.3540 (2.2BN), 1.3600 (1.27BN)Technical & Trade ViewsSP500 Bias: Bullish Above Bearish Below 3900Primary support is 3900Primary upside objective is 4120Failure at 3880 opens a test of 385020 Day VWAP bullish, 5 Day VWAP bearishEURUSD Bias: Bullish Above Bearish below 1.0450Primary support is 1.0450Primary upside objective is 1.0620Failure at 1.04 opens a test of 1.035020 Day VWAP bullish, 5 Day VWAP bearishGBPUSD Bias: Bullish Above Bearish below 1.21Primary support is 1.21Primary upside objective 1.24Failure at 1.2080 opens a test of 1.203020 Day VWAP bullish, 5 Day VWAP bullishUSDJPY Bias: Bullish above Bearish Below 137.70Primary resistance is 137.70Primary downside objective is 132Acceptance above 138 opens a test of 139.3020 Day VWAP bearish, 5 Day VWAP bullishBTCUSD Bias: Intraday Bullish Above Bearish below 16500Primary support is 16500 Primary upside objective is 18000Failure at 16400 opens a test of 1600020 Day VWAP bearish, 5 Day VWAP bullish

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