FOREX: A$ Gains The Standout, AUD/NZD At Fresh Cycle Highs, Steady Elsewhere

Oil prices are marginally higher as the market monitors Ukraine/Russia developments with negotiations ongoing, US President Trump criticizing Ukraine’s President Zelenskyy, Ukraine striking Russian refineries and Russia’s President Putin encouraging Indian oil purchases. Market expectations that there would be a peace deal faded over last week driving oil prices higher and they remain sensitive to events.

• WTI is up 0.2% to $60.21/bbl after falling to $59.97 with moves below $60 short-lived. It rose 2.7% last week. Brent is 0.2% higher at $63.88/bbl following a peak of $63.94 and a low at $63.63. It was up 2.4% last week.
• Both benchmarks have been in a very narrow range today as they wait for more information regarding geopolitical developments, including Venezuela, and monthly oil reports. Forecasts will be monitored closely for any upward revisions to 2026 surplus projections. The EIA short-term energy outlook is on Tuesday and OPEC & IEA reports on Thursday.
• Trump said that he was disappointed with how Zelenskyy has treated the latest US proposal and accused him of not reading it.
• The US and Ukraine agreed on a “framework for security arrangements” with “necessary deterrence capabilities to sustain a lasting peace”, according to the US State Department. However, Russia said that Trump’s National Security Strategy was “largely consistent” with Russia’s view.
• Ukraine struck Rosneft’s Ryazan refinery on the weekend in response to heavy attacks on its energy generation. This followed strikes late last week on Russia’s Syzran refinery and Temryuk port.
• Later US November NY Fed 1-yr inflation expectations and German October IP print. The ECB’s Cipollone and BoE’s Taylor & Lombardelli speak.

The BBDXY has had a range today of 1210.91 - 1212.57 in the Asia-Pac session; it is currently trading around 1211, -0.10%. The USD has traded slightly softer in the Asian session. US yields extended their bounce last week and risk has consolidated its recent gains. The USD saw decent demand back toward the 1211 area at the back-end of last week and it looks like the range 1210-1230 could be here for the moment. On the day look for resistance again back towards the 1215-1217 area where sellers should remerge initially, support remains toward 1210/11 which needs to be worked through and then the more important 1205 area.

• EUR/USD -  Asian range 1.1639-1.1655, Asia is currently trading 1.1655. The pair continues to consolidate around the 1.1650 area. On the day it looks like dips back toward 1.1580-1600 could be supported initially, looking to retest the 1.1680 area again eventually.
• GBP/USD - Asian range 1.3323-1.3342, Asia is currently dealing around 1.3340. The pair is consolidating on a 1.33 handle. I remain skewed toward shorts but patience is required and we are now approaching levels where I will be watching for any signs of potentially topping out. On the day GBP should see support back toward  the 1.3260-1.3290 area, while above here look for the market to test the 1.3370-90 area again at some point. 
• Cross asset : SPX +0.20%, Gold $4210, US 10-Year 4.133%, BBDXY 1211, Crude Oil $60.22
• Data/Events : EZ Sentix Investor Confidence, Germany Industrial Production SA

Fig 1: GBP/USD Spot Weekly Chart

Source: MNI - Market News/Bloomberg Finance L.P

• Despite the worse than expected GDP, the NIKKEI has hovered around where it began the day at 50,478 above the 20-day EMA of 49,919
• The KOSPI is up again with key tech stocks like Samsung over up over +1.2% today, seeing the index up by +0.25% and the TAIEX rose +0.93% has TSMC jumped over 2% Monday.  
• The onshore offshore divide was evident in China with the Hang Seng down heavily by -1.1%, whilst the CSI 300 rose by over 1%.  Shenzhen is the outperformer on the day with gains of +1.3% with some tech stocks up strongly.  The performance highlights a strong investor focus on technology and advanced manufacturing sectors, which have been a key growth area in the region
• The NIFTY 50 continues to moderate and is down -0.12% Monday.  Since hitting new highs on NOV 27, the NIFTY has fallen five out of seven trading days though the losses have been contained.  The NIFTY sits only 0.25% below the high of 26,215.
• SE Asia's bourses are led again by the Jakarta Composite which is up strongly by +0.95%, to reach overbought on the 14-day Relative Strength Index.  It last reached overbought in August where it remained for several trading days.  The FTSE Malay KLCI is down -0.55% and teh SE Thai -0.10%