EUROPEAN INFLATION: German State-Level Details: Energy Main Upside Driver
Nov-28 11:53
Looking a bit closer at this morning's German state level November CPI data shows the non-core categories being the main movers this month, with energy having accelerated by 0.7 to 0.8pp while food should have slowed down around 0.3pp. Services meanwhile should have remained roughly stable or may be marginally firmer than in October.
- Specifically, we see services inflation remaining at 3.5 Y/Y in November with risks of it having accelerated to 3.6% - that would represent the highest rate in the category since April. Analysts had some mixed views here, with seeing risks for an acceleration but others seeing the yearly rate slightly lower again. Air fares seemed to have remained firm, which was also seen by some but not all analysts.
- Looking at the services-heavy subcategories, trends vs October were mixed (all Y/Y): We see communication around -0.1 to 0.0% (0.0% prior), recreation and culture around 1.7% (1.9% prior), and restaurants and hotels roughly unchanged (3.6% prior).
- The mixed-weighting transport category meanwhile will likely come in around 3.3-3.4% Y/Y in November (2.6% prior). As mentioned, due to an energy acceleration add to continued high airfares.
- Elsewhere, we see food inflation incl. non-alcoholic beverages at around 1.7% Y/Y (2.0% prior), pointing towards a deceleration also in food excl. beverages which will be released by Destatis on a national level later.
- Categories associated with 'core goods' (clothing and footwear as well as furnishings and household equipment) are likely to have seen a deceleration on net (we see the chances of late-November seasonal sales ("Black Friday") affecting the sample as rather low).
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OUTLOOK: Price Signal Summary - Gold Remains Above The 50-Day EMA For Now
Oct-29 11:40
- On the commodity front, Gold traded lower Tuesday, extending the bear cycle that started Oct 20. Note that the trend has recently been in overbought territory and the deeper retracement is allowing this condition to unwind. Attention is on the next key support at the 50-day EMA, at $3842.8. A clear break of this average would strengthen a bear theme. Initial resistance is at $4161.4, the Oct 22 high.
- Recent gains in WTI futures appear corrective for now, however, note that price has traded through the 50-day EMA, at $61.10 The breach of this average signals scope for a stronger recovery. A resistance at $62.34, the Oct 8 high, has also been pierced. A clear break of it would expose key resistance at $65.77, the Sep 26 high. Key support and the bear trigger has been defined at $55.96, the Low Oct 20.
SONIA OPTIONS: Call Condor buyer
Oct-29 11:37
SFIH6 96.70/96.75/96.80/96.85c condor, bought for half in 7.5k.
OUTLOOK: Price Signal Summary - Bear Threat In GBPUSD Remains Present
Oct-29 11:27
- In FX, support to watch in EURUSD is 1.1542, the Oct 9 low. Clearance of this level is required to cancel a recent bullish signal and this would confirm a resumption of the bear cycle that started Sep 17. A break would open 1.1516, the 76.4% retracement of the Aug 1 - Sep 17 bull leg, and clearance of 1.1516 would expose key support at 1.1392, the Aug 1 low. Price needs to trade above 1.1728, the Oct 17 high, to strengthen a bull theme.
- A bear threat in GBPUSD remains present and this week’s sell-off strengthens this theme. The pair has breached 1.3249, the Oct 14 low and a bear trigger. The break confirms a resumption of the downtrend that started Sep 17 and sights are on 1.3220 next (pierced), a 0.764 projection of the Sep 17 - 25 - Oct 1 price swing. The break lower has also exposed key support at 1.3142, Aug 1 low. Initial resistance is 1.3377, the 20-day EMA.
- The trend condition in USDJPY is unchanged, it remains bullish and recent weakness appears to have been a correction. Attention is on key resistance at 153.27, the Oct 10 high. A break of this level would confirm a resumption of the medium-term uptrend. This would open 153.82, a 1.618 projection of the Sep 17 - 26 - Oct 1 price swing. Note that MA studies are in a bull-mode position, highlighting a primary uptrend. First important support to watch lies at 151.19, the 20-day EMA.
