EUROPEAN INFLATION: German CPI Contributions Rise Not Solely Based On Energy
German final December HICP was unrevised from the flash readings at 2.8% Y/Y (2.4% prior) and 0.7% M/M (-0.7% prior). The final reading of CPI was also unrevised on the yearly measure at 2.6% Y/Y (2.2% prior), while the sequential reading was upwardly revised by 0.1pp to 0.5% M/M, contrary to MNI's expectations based on state-level data (-0.2% prior). Core CPI printed at 3.3% Y/Y (also upwardly revised, 3.1% flash, 3.0% prior), the highest rate since March 2024.
- Overall, the data suggests that while around half of the 0.4pp acceleration came from energy, higher inflation was also seen in a wider set of categories, with the goods contribution rising overall by 0.34pp vs Nov, and services contributing 0.04pp more than previously. MNI's inflation breadth tracker (see next bullet) supports this view.
- On the 0.16pp contributions increase in the transport category, 0.13pp came from car fuel. The 0.09pp higher contribution in the recreation and culture category was broad-based within the respective subcategories, although this category was seasonally soft in December 2023 so looks at least partially to be reflecting base effects.
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Historical bullets
SILVER TECHS: Structure Remains Bearish
- RES 4: $35.226 - 61.8% of the 2011 - 2020 major bear leg
- RES 3: $35.167 - 2.00 proj of the Aug 8 - 26 - Sep 6 price swing
- RES 2: $33.125/34.903 - High Nov 1 / High Oct 23 and the bull trigger
- RES 1: $32.338 - High Dec 12
- PRICE: $30.463 @ 08:03 GMT Dec 17
- SUP 1: $29.642 - Low Nov 28
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
A bear cycle in Silver that started Oct 23 remains in play and recent gains appear to have been a correction. Price has recently traded through a trendline drawn from the Aug 8 low. A clear resumption of the bear leg would open $28.446, a Fibonacci retracement. On the upside, a continuation of recent gains would instead signal scope for a climb towards $33.125, the Nov 1 high. The short-term bull trigger is $32.338, the Dec 12 high.
EGB OPTIONS: Schatz outright call buyer
DUF5 107.40c, bought for half in 6.5k.
USDCAD TECHS: Northbound
- RES 4: 1.4436 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: 1.4272 Intraday high
- PRICE: 1.4270 @ 07:58 GMT Dec 17
- SUP 1: 1.4099/3955 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
USDCAD bulls remain in the driver’s seat and the pair continues to appreciate. Recent gains resulted in a break of 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 1.4296 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4099, the 20-day EMA.
