GERMAN DATA: Dec 'Core' Factory Orders Improve But Remain Around 2013 Levels
German factory orders rose in December by 6.9% M/M (vs +2.0% cons). November's print saw a small upward revision of 0.2pp to -5.2%. Regardless of the uptick, the overall picture in German manufacturing remains bleak - the 'core' index now stands around 2013 levels.
- The Y/Y comparison also came in above expectations at -6.3% (vs -10.5% cons; -1.4% prior, revised from -1.7%). For 2024 as a whole, this brought in factory orders at -3.0% vs 2023.
- The sequential jump in the headline figure can be attributed to the "other vehicles" category (i.e. excluding cars, trucks and related parts), which saw a 55.5% M/M jump.
- Looking at underlying ‘core’ orders (excl. large-scale one-offs), they rose 2.2% M/M. On a 3m/3m basis, they trend upwards a little, at +1.3%, the joint highest rate since March 2022 (vs +0.4% prior).
- The increase was quite broad-based, with both domestic and foreign 'core' orders up. Within the foreign category, Eurozone orders stood out.
- The sequential comparison across sectors shows the main categories all ticking up (details see table).
- Real turnover in manufacturing, which can provide some signal for the December industrial production release (due tomorrow), was -0.1% M/M and -3.9% Y/Y. Current consensus for Dec IP stands at -0.7% M/M (1.5% prior) and -2.1% Y/Y (-2.8% prior) - so the signal for tomorrow’s print is ambiguous.
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USDCAD TECHS: Pullback Considered Corrective
- RES 4: 1.4674 2.0% 10-dma envelope
- RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4305 @ 08:03 GMT Jan 7
- SUP 1: 1.4322/4280 20-day EMA / Low Jan 6
- SUP 2: 1.4232 Low Dec 17
- SUP 3: 1.4155 50-day EMA
- SUP 4: 1.4011 Low Dec 5
USDCAD traded lower Monday. The trend set-up remains bullish and a move down appears corrective - for now. The latest pause in the uptrend appears to be a flag formation - a bullish continuation signal. Note too that MA studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4508 next, a Fibonacci projection level. 1.4322, the 20-day EMA, has been pierced. A clear break of the EMA would open 1.4155, the 50-day EMA.
AUDUSD TECHS: Testing Resistance At The 20-Day EMA
- RES 4: 0.6471 High Dec 9
- RES 3: 0.6400 50-day EMA
- RES 2: 0.6341 High Dec 18
- RES 1: 0.6273/0.6302 20-day EMA / High Jan 6
- PRICE: 0.6275 @ 07:59 GMT Jan 7
- SUP 1: 0.6179 Low Dec 31
- SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
Despite Monday’s gains, a bearish trend condition in AUDUSD remains intact. Recent weakness maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. Scope is seen for an extension towards 0.6158 next, a Fibonacci projection. Initial firm resistance to monitor is 0.6276, the 20-day EMA. It has been pierced but for now, remains intact.
GILTS: Opening calls
Gilt calls, 92.00/92.04
