ASIA: Coming Up In The Asia-Pac Session On Wednesday
| 2300GMT | 0700HKT | 1000AEDT | South Korea Dec Unemployment rate |
| 2350GMT | 0750HKT | 1050AEDT | Japan Dec Money Stock |
| 0000GMT | 0800HKT | 1100AEDT | Australia to Sell A$800 Million 3.5% 2034 Bonds |
| 0110GMT | 0910HKT | 1210AEDT | Japan Rinban Operations |
| 0300GMT | 1100HKT | 1400AEDT | South Korea Dec Bank Lending To Household Total |
| 0315GMT | 1115HKT | 1415AEDT | EU ECB's Lane Gives Fireside Chat |
| 0600GMT | 1400HKT | 1700AEDT | Japan Dec Machine Tool Orders |
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FOREX: J.P. Morgan Remain Bullish USD
J.P. Morgan: "Pushbacks and questions on the 2025 outlook
Outlook: We remain bullish USD but it has been rangebound for the last month and investors seem divided on how aggressive policy could be, so we review the key pushbacks and questions on our 2025 Outlook. European pessimism isn’t well priced in our view. Watch Monday’s PMI. Risks to USD from US yields into the FOMC are mitigated by JPY and CHF longs. USD/CAD can test 1.50 if the US and Canada enter a trade war. EUR/CHF below 0.90 in Q1 despite 50bps SNB rate cut. Out-of-consensus BoJ hike call would support JPY. Norges Bank and Riksbank contrast, long NOK/SEK. BoE on-hold, but quality of GBP carry falling as UK growth weakens.
Macro Trade Recommendations: Stay long USD & short EUR as the election trade is not finished. Other macro themes include services/mfg r.v., policy r.v., EUR-specific weakness, flows r.v. and ongoing carry rotation. Short EUR vs USD, JPY, CHF, Scandis. Long NOK vs SEK, GBP, PLN. Short CHF/JPY, hold CAD/JPY put spread.
Emerging Markets FX: Challenging outlook for EM FX, although technicals argue for patience in adding to bearish positions, so stay neutral. Bearish CNY, THB, SGD, COP, PLN, CZK; Bullish TRY, ILS, INR.
FX Derivatives: CAD/JPY and USD/JPY digi puts look attractively priced. Zero-cost long/short constructs using JPY correlations offer leverage against EUR and CNH. Consider “zero-carry” long Yen delta exposure via partially delta-hedged risk-reversals. Buy 2M one-touch USD/CAD calls.
Technicals: Look for more EUR/USD consolidation after the Sep-Nov slide. GBP/USD range trading below key levels just above 1.28. USD/JPY tracks DM yields to higher levels; watch for tactical move to fade soon. AUD/USD struggles to find solid ground in the lower end of the 2023-2024 trading range."
MACRO ANALYSIS: MNI US Macro Weekly: Inflation Data Keep Fed Cut On Track
We have published and e-mailed to subscribers the MNI US Macro Weekly offering succinct MNI analysis across the range of macro developments over the past week. Please find the full report here:
USDCAD TECHS: Fresh Cycle High
- RES 4: 1.4393 2.0% 10-dma envelope
- RES 3: 1.4327 2.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4296 2.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- PRICE: 1.4236 @ 16:38 GMT Dec 13
- SUP 1: 1.4069/3944 20- and 50-day EMA values
- SUP 2: 1.3928 Low Nov 25 and a key support
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend direction in USDCAD remains up and this week’s gains to a fresh cycle high, reinforces the current bullish theme. The pair has cleared 1.4178, the Nov 26 high, to confirm resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Sights are on 1.4246 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4069, the 20-day EMA.
