Market Roundup
Brazil's 2017 year-end selic rate forecast 10.50 pct vs 10.50 pct previous week - Weekly central bank survey
Brazil's 2016 GDP growth forecast -3.49 pct vs -3.48 pct previous week - Weekly central bank survey
China banking sector total assets +16.3 pct y/y to 222.25 trln yuan at end Nov- regulator
China banking sector total liabilities +16.2 pct y/y to 204.96 trln yuan at end Nov- regulator
Russia 2017 oil exports will be "slightly" higher than in 2016 - Interfax cites energy ministry
BOJ'S Kuroda: Japan economy now able to move forward supported by tailwinds from global economic recovery
BOJ'S Kuroda: Japan's economy no longer in deflation but yet to achieve 2 pct inflation target, which is a global standard
BOJ'S Kuroda: Deceleration in global trade volume was largely driven by sluggish demand in business fixed investment, mainly in emerging economies
China commerce ministry expects foreign direct investment at 785 bln yuan in 2016
Thai Nov customs-cleared trade balance +1.54 bln dlrs (vs +0.50 bln dlrs in Reuters poll) - Commerce ministry
Thai Nov customs-cleared imports +3.0 pct yr/yr (vs -1.05 pct in Reuters poll) - Commerce ministry
Thai Nov customs-cleared exports +10.2 pct yr/yr (vs +1.55 pct in Reuters poll) - Commerce ministry
China industry minister expects China's industrial output to grow around 6 pct y/y in 2017 - Official paper
Economic Data Ahead
No economic data is scheduled for release as equity, forex, money and commodity markets will remain closed on account of Christmas Day (Observed).
FX Beat
DXY: The U.S dollar index recovered slightly till 103.23 after declining till 102.59. The index taken support near 10- day MA and is currently trading around 102.90. Resistance seen around 103.60 and any break above targets 105. On the lower side, any break below 102.55 (10- day MA) will drag the index down till 101.70 (21- day MA)/100.60. Short term bullish invalidation only below 98.
EURUSD: EUR/USD largely rangebound in holiday-thinned trade. The pair made a high of 1.04990 and slightly declined from that level. It is currently trading around 1.04525. Close above 10- day MA required for further bullishness. Any close above will take the pair to next level till 1.0572 (21- day MA)/1.0670. Short term bullishness only above 1.06700 level. On the lower side, strong support is seen at 1.03400 (127.2% retracement of 1.03665 and 1.04720) and any violation below will drag the pair till 1.02835 (161.8% retracement of 1.05047 and 1.08700).
AUDUSD: AUD/USD edges higher from multi-month lows of 0.7159. Upside finds strong resistance by 5-DMA at 0.7215. Technical indicators are biased lower, RSI in oversold territory. The pair finds strong support at 0.7145, break below could see further drag. On the higher side minor resistance is around 0.7230 (5- day MA) and any break above will take the pair till 0.7300 (38.2% retracement of 0.75230 and 0.71599)/0.7435/0.7500.
GBP/USD: Cable extends grind below 1.23 handle. The pair trades an extremely narrow range, rose till 1.22952. At the time of writing it was trading at 1.2267. Short term trend is still weak as long as resistance 1.2300 (support turned into resistance) holds. On the higher side, any violation above 1.23000 will take the pair to next level till 1.2380/1.2440 in the short term. Major support is around 1.2230 (61.8% retracement of 1.27750 and 1.19048) and any violation below will drag the pair down till 1.2150/1.2080.
USD/JPY: USD/JPY is facing strong support at 10- day MA and slight weakness can be seen only below that level. It is currently trading around 117.02. The pair’s major resistance is around 119 and break above targets 120. On the lower side minor support is around 117.05 (10-day MA) and any break below targets 116.69 (daily Tenken-Sen)/115.27 (21- day MA).
AUD/NZD: AUD/NZD is on verge of breach of 'Symmetric Triangle' pattern. The pair finds series of resistance on the upside: Ichi cloud base (1.0501), 100-DMA (1.0501), Triangle top (1.0485). Price action pivotal at triangle base at 1.04, decisive break below will see drag upto 1.0237. On the flipside, a breakout above 1.0501 could see test of 1.0612. Watch out for breach of triangle base at 1.04 to go short, target 1.0350, 1.0310, 1.0240
Equities Recap
European stock markets are closed due to Christmas day. Tokyo's Nikkei closed down 0.16 pct at 19,396.64, Seoul shares ended up 0.14 pct.
China's CSI300 Index gained 0.4 pct at 3,322.40 points, while Shanghai Composite Index finished the day up 0.4 pct at 3,122.57 points. Taiwan stocks closed up 0.4 pct at 9,110.54 points.
Treasuries Recap
China: The Chinese sovereign bonds gained as President Xi Jinping dumped economic growth target of 6.5 percent in his Friday’s speech, targeting debt bubble and economic outlook. We foresee that bond prices will keep drifting between small gains and losses in quiet trading session. The yield on the benchmark 10-year bonds fell nearly 2 basis points to 3.19 percent, the long-term 30-year bond yield dipped 3 basis points to 3.76 percent and the yield on the short-term 2-year bonds slid 7 basis points to 2.99 percent.
JGBs: The Japanese government bonds traded nearly flat as investors remain sidelined in any big deal amid closer of many major global markets on occasion of Christmas holidays. The benchmark 10-year bond yield hovered around 0.05 percent, the long-term 30-year bond yield also climbed 1/2 basis point to 0.68 percent and the yield on short-term 2-year note remained steady at -0.17 percent.
India: The Indian sovereign bonds slumped ahead of the Reserve Bank of India’s auction of 21 days Government of India Cash Management Bills under the Market Stabilisation Scheme (MSS) for a notified amount of INR500 billion. The yield on the benchmark 10-year bonds rose nearly 3 basis points to 6.57 percent and the yield on short-term 2-year note bounced 1 basis point to 6.35 percent.
