EU HEALTHCARE: Johnson & Johnson (JNJ): Q4 Results

• RES 4: 113-22+ High Nov 25 and a key resistance
• RES 3: 113-09   76.4% retracement of the Nov 25 - Dec 10 bear leg
• RES 2: 113-07   High Dec 3 
• RES 1: 112-31/113-00+ High Dec 18 / 61.8% of Nov 25 - Dec 10 leg
• PRICE:‌‌ 112-12+ @ 11:26 GMT Dec 22
• SUP 1: 112-06/111-29   Low Dec 16 / 10 and the bear trigger
• SUP 2: 111-19   1.236 proj of the Oct 17 - Nov 5 - 25 price swing
• SUP 3: 111-11   1.382 proj of the Oct 17 - Nov 5 - 25 price swing 
• SUP 4: 111-00   Round number support 

Treasuries have pulled back from their recent highs. A key short-term resistance has been defined at 112-31, the Dec 18 high. Clearance of this level would signal scope for a stronger corrective phase and open 113-00 initially, a Fibonacci retracement point. For bears, a continuation lower would  refocus attention on 111-29, the Dec 10 low and a key short-term support. A breach of this support resumes the bear cycle that started Oct 17.

• Fed Funds implied rates are broadly unchanged since Friday’s close, with little material spillover from WTI futures climbing a further 1.8% or Cleveland Fed’s Hammack admittedly sticking to the hawkish script over the weekend.
• It holds a small hawkish move after Williams on Friday, with low odds of a fourth consecutive cut in January (5bp) and with a next cut still leaning to but not fully priced for April (cumulative 22bp).
• Cumulative cuts from 3.64% effective: 5bp Jan, 15bp Mar, 22bp Apr, 35bp Jun (new Fed chair), 51.5bp Sep and 59.5bp Dec.
• SOFR futures are 0-1.5 ticks lower looking to end-2027, with the terminal implied yield of 3.10% (Z6) remaining with ranges over the past month.
• Re-upping several rounds of flow worth highlighting from early London trade: SFRZ6 ~6.5K given at 96.900, SFRH7/H9 ~3.3K given at 40.5 and SFRH6 96.56/96.43/96.37/96.18 broken put condor 4K given at 5, desks point to closing out of an existing position.
• Cleveland Fed’s Hammack (’26 voter, hawk) in WSJ remarks over the weekend said a pause in rates is her base case for now, waiting to see “clearer evidence that either inflation is coming back down to target or the employment side is weakening more materially”. She doesn’t put much weight on any single economic report and said that last week’s inflation data includes “noise” due to the lack of sampling during the shutdown. “It’s just one number and I want to take some time. Fortunately, we have a lot of time before our next meeting to see how the broader picture comes in.”

Spot gold (+1.67%) made light work out of previous $4381.52/oz all-time highs this morning, extending to around $4420/oz in early European trade. While some may conjecture over further Fed easing, geopolitical tensions, a slightly weaker dollar and year-end hedging flows, a clear headline driver for the today's move remains scant - highlighting the market's appetite for further long positioning in gold which while ending the previous corrective cycle.

• ETF flows have turned positive again in late November as a rolling 30-day sum, but interestingly have not made up for sales following the October 21 holdings peak. This suggests non-retail buyers had a net-positive effect on spot since late October.
• More broadly, decomposing gold returns into changes of real yields, the dollar index, ETF flows and a risk proxy shows large unexplained residuals towards the end of this year. This would point towards price-insensitive buyers remaining in play.
• JP Morgan meanwhile report on Friday that "debasement trades (Gold up & USD/JPY up duals) are consensus". They see gold at $5,055/oz by the final quarter of 2026, rising toward $5,400/oz by the end of 2027 as "the long-term trend of official reserve and investor diversification into gold has further to run".
• In parallel, Silver also remains in a bull cycle, setting fresh $69.45/oz all-time highs this morning. Recent returns here have been even more pronounced, bringing the gold/silver ratio down below 64 for the first time since February 2021. A break below 62.34 would mean its lowest level since July 2014.