ECB: Macro Since Last ECB - Growth: Prelim Dec PMIs Reverse Prior Rise
Dec-17 18:27
- PMI surveys had on balance improved although throughout November but gave this back in Tuesday’s preliminary December release to leave implied activity at best similar to that ahead of the late Oct meeting.
- The manufacturing PMI has dipped further to 49.2 in the preliminary Dec reading from 49.6 in Nov and 50 in October, for its lowest since April as it starts to imply contractionary manufacturing again after an average of 49.9 in the previous six months. Context is important though, following heavy declines implied in 2024 (average 45.9) and 2023 (45.0).
- The services PMI had pushed higher again to 53.6 in November (highest since May 2023) but has dipped to 52.6 in the preliminary Dec reading for back to where it was in the flash October reading prior to the October meeting.
- France finally improved in November with a service PMI of 51.4 before holding onto some of this gain at 50.2 in December, the first >50 readings since Aug 2024 but still firmly a laggard in level terms.
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US: FED Reverse Repo Operation: Excess Liquidity Measure Rises Slightly
Nov-17 18:21
RRP usage rises to $3.172B with 7 counterparties this afternoon from last Friday's $1.559B - lowest level since mid-March 2021. Compares to this years highest excess liquidity measure off $460.731B on June 30.
EURUSD TECHS: Monitoring Resistance
Nov-17 18:00
- RES 4: 1.1728 High Oct 17
- RES 3: 1.1694 50.0% retracement of the Sep 17 - Nov 5 bear leg
- RES 2: 1.1669 High Oct 28 and key resistance
- RES 1: 1.1656 High Nov 13
- PRICE: 1.1596 @ 16:06 GMT Nov 17
- SUP 1: 1.1530/1469 Low Nov 7 / 5 and the bear trigger
- SUP 2: 1.1425 1.500 proj of the Oct 17 - 22 - 28 price swing
- SUP 3: 1.1392 Low Aug 1 and bear trigger
- SUP 4: 1.1313 Low May 30
EURUSD is trading below last week’s high. Resistance to watch is 1.1669, the Oct 28 high. A break of this level would strengthen a short-term bull theme and highlight a stronger reversal. Note that moving average studies are in a bear-mode position. This highlights a dominant downtrend and suggests that gains since Nov 5 are corrective. A reversal lower would refocus attention on key support at 1.1469, the Nov 5 low.
OPTIONS: Some Exiting Of Upside Leaning, Though Overall Upside Bias Remains
Nov-17 17:52
Monday's Europe rates/bond options flow included:
- RXZ5 129.50/129/128.50/128p condor (+1/-1.7/+0.4/+0.3), sold at 16.5 in 10
- RXG6 129.50/131.00/131.50/134.50 broken c condor vs 127.50/126.50ps, bought the condor for 4.5 and 5 in 7.5k
- ERM6 98.25/98.43/98.50/98.68 call condor vs 97.87 put. Buys back puts/sells call condor, paying 1.75 and 2 in 10k. Recall this was bought for example for 1.5 (bought condor vs put) in 10k on Oct 22
- ERM6 97.8125/98.3125RR, bought the Call for 0.75 in 8k
- ERM6 98.12/98.37cs, bought for 4 in 5k
- 0RH6 98.00^ bought in 4k vs 0RH6 96.68/98.18^^ sold in 6k Paid 13.25 and 13.5
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