FOREX: BBDXY Back To Unchanged, AUDJPY The Main Mover In G10 FX
The BBDXY has recovered back to positive on the session. The index is currently at 1204.2 (+0.05%), after testing resistance at the December 23 high (1205.4) on Wednesday. Today’s global data calendar includes final manufacturing PMIs from the Eurozone, UK and US – unlikely to be material market movers. Although not an official public holiday in many countries, FX market activity may continue to be limited given the single session between New Year’s and the weekend.
- AUD outperforms the G10 basket, with upside in domestic yields, precious metals and equity benchmarks seemingly lending support. AUDUSD is up 0.3% to 0.6690. The trend condition in the pair remains bullish and recent strong gains reinforce current conditions. The December 29 high at 0.6728 represents a key resistance to monitor.
- Our Asia-Pac team writes that there are ~45bps of RBA hikes priced through year-end. By the end of January, the market should have a clearer picture of whether they can expect interest rate hikes in 2026. Quarterly inflation data, due to be released on January 28, will confirm or allay RBA fears that upward price pressures are entrenched in the economy. November CPI data is due next Wednesday.
- JPY modestly underperforms the G10, with USDJPY up 0.1% to 156.9. Note that today was a public holiday in Japan. The trend condition in USDJPY is bullish, with the bull trigger located at 157.89 (Nov 20 high). In the months ahead, focus in Japan remains on the pace and magnitude of the BOJ’s hiking cycle, and the Takaichi administration’s expansionary fiscal plans.
- AUDJPY is up 0.4% at 105.0. Immediate focus is on the Dec 29 high of 105.2. A breach would confirm a resumption of the dominant uptrend.
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EQUITY TECHS: E-MINI S&P: (Z5) |Holding On To Its Recent Gains
- RES 4: 6953.75 High Oct 30 and bull trigger
- RES 3: 6900.50 High Nov 12
- RES 2: 6852.56 76.4% retracement of the Oct 30 - Nov 21 bear leg
- RES 1: 6864.50 High Dec 1
- PRICE: 6856.75 @ 07:23 GMT Dec 3
- SUP 1: 6674.50/6525.00 Low Nov 25 / 21
- SUP 2: 6500.00 Round number support
- SUP 3: 6476.62 23.6% retracement of the Apr 7 - Oct 30 uptrend
- SUP 4: 6427.00 Low Sep 2
S&P E-Minis are holding on to their recent gains following the recovery from the Nov 21 low. The climb has resulted in a breach of the 20- and 50- day EMAs. This highlights a bullish development and the likely end of the corrective cycle between Oct 30 and Nov 21. A continuation higher would signal scope for a move towards the key resistance and bull trigger at 6953.75, the Oct 30 high. Key support lies at 6525.00, the Nov 21 low.
MNI: SWISS NOV CPI -0.2% M/M, +0.0% Y/Y
- MNI: SWISS NOV CPI -0.2% M/M, +0.0% Y/Y
- SWISS NOV CORE CPI +0.4% Y/Y
- SWISS NOV SERVICES CPI +1.0% Y/Y
- SWISS NOV GOODS CPI -1.6% Y/Y
- SWISS NOV DOMESTIC GOODS CPI +0.4% Y/Y
- SWISS NOV IMPORTED GOODS CPI -1.3% Y/Y
SWITZERLAND DATA: Swiss November CPI Surprises A Tenth To Downside
Swiss CPI inflation printed a tenth below consensus at 0.0% in November (vs 0.1% cons and prior), and -0.2% M/M (-0.1% cons). Core CPI was also a tenth below consensus, at 0.4% Y/Y (vs 0.5% cons and prior).
- This means Q4 average inflation to date prints below the SNB forecast. Despite this, a more material undershoot with repeated readings below 0% would likely be needed for the SNB to cut into negative territory.
- The main categories on first sight appear to indicate that downside came from housing inflation, while restaurants and hotels inflation also slowed. Key categories below (all Y/Y):
- Domestic 0.4% vs 0.5% prior
- Imported -1.3% vs -1.3% prior
- Services 1.0% vs 1.1% prior
- Goods -1.6% vs -1.6% prior
- Energy and fuels -4.8% vs -5.2% prior
- Housing rentals (quarterly update) 1.6% vs 1.9% prior
