EUROPEAN INFLATION: Little revisions in German Final CPI
Headline HICP and CPI unrevised. Looking at CPI details on first sight:
⦁ Services (3.5% vs 3.5% prior), goods (1.1% vs 1.2% prior), energy (main headline upside driver, -0.1% vs -0.9% prior), and food (1.3% prior) all unrevised from the flash readings on a Y/Y basis.
⦁ As expected after the state-level data, core goods have seen a material slowdown in November in Germany, with clothing and footwear at 0.5% Y/Y (1.2% prior) and furniture and housing equipment at 0.1% Y/Y (0.8% prior).
⦁ Within the services-heavy subcategories, also as expected after state-level data, trends were mixed but category for Y/Y in November vs October were within 0.1pp for all categories including health, communication, recreation and culture, education, and hospitality were.
⦁ Mixed-weighting transport category accelerated to 3.3% Y/Y (2.6% prior) amid both higher motor fuels and higher airfares on a Y/Y basis, keeping room for an unwind especially in the latter over the coming months.
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BRENT TECHS: (F6) Short-Term Resistance Remains In Play
- RES 4: $71.45 - 76.4% retracement of the Jun 23 - Oct 20 bear leg
- RES 3: $70.69 - High Jul 30
- RES 2: $69.29 - High Sep 26 and a key resistance
- RES 1: $65.98 - High Oct 9
- PRICE: $64.95 @ 07:09 GMT Nov 12
- SUP 1: $62.84/59.97 - Low Nov 6 / 20 and the bear trigger
- SUP 2: $58.72 - Low May 5
- SUP 3: $57.99 - Low Apr 9 and a key support
- SUP 4: $56.05 - 2.00 proj of the Jul 30 - Aug 13 - Sep 26 price swing
Activity since Oct 24 in Brent futures appears to be a flag formation - a bullish continuation pattern. This suggests that a corrective cycle remains intact - for now. Price has recently traded through the 50-day EMA, at $64.58. Clearance of this hurdle signals scope for a stronger recovery. The next resistance to monitor is $65.98, the Oct 9 high. A clear breach of it would expose a key resistance at $69.29, the Sep 26 high. Key support lies at $59.97, Oct 20 low.
UK: Streeting says he is not planning leadership challenge
"*THERE IS NO LEADERSHIP CHALLENGE FROM ME, STREETING SAYS" Bbg
Note that this is in response to the front page of the Guardian that discusses that "Downing Street has launched an extraordinary operation to protect Kier Starmer" and names Streeting as a likely senior challenger.
- Opinion pieces last night noted that this may be briefings from Number 10, knowing that Streeting was already due to do the media round today, in order to force him to deny the allegations and pledge public supports for Starmer. And this is seen to be party management ahead of the Budget.
GILT TECHS: (Z5) Trend Needle Points North
- RES 4: 94.60 1.764proj of the Sep 3 - 11 - 26 price swing
- RES 3: 94.24 1.618 proj of the Sep 3 - 11 - 26 price swing
- RES 2: 94.00 Round number resistance
- RES 1: 93.98 High Nov 4 and the bull trigger
- PRICE: 93.87 @ Close Nov 11
- SUP 1: 93.09/75 20-day EMA / Low Nov 10
- SUP 2: 92.38 Low Oct 20
- SUP 3: 92.36 50-day EMA
- SUP 4: 91.82 High Sep 11
The trend theme in Gilt futures remains bullish and this week’s strong bounce - so far - reinforces a bull theme. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on the bull trigger at 93.98, the Nov 4 high. A clear break of this hurdle would confirm a resumption of the uptrend and open 94.24, a Fibonacci projection. Support to watch lies at 93.09, the 20-day EMA.
