MNI US OPEN - DXY Drop Puts Q4 Back to Flat
EXECUTIVE SUMMARY
- US TARGETING OIL TANKERS IN BID TO STYMIE GLOBAL BLACK MARKET: WSJ
- JAPAN’S TAKAICHI WON’T IMPLEMENT IRRESPONSIBLE TAX CUTS: NIKKEI
- FRENCH PARL'T TO PASS SPECIAL LAW TO MAINTAIN STATE FUNCTIONS W/O '26 BUDGET
- COLOMBIA DECLARES ‘ECONOMIC EMERGENCY’ AFTER TAX RISES BLOCKED
Figure 1: Gold rally accelerates through October highs, sights on psychological $4500/oz handle next
Source: MNI, Bloomberg Finance L.P.
NEWS
US (WSJ): U.S. Targeting Oil Tankers in Bid to Stymie Global Black Market
The U.S.’s pursuit of oil tankers around Venezuela is part of a new legal strategy under the Trump administration to seize ships that transport black market oil around the world, according to Justice Department officials. The fresh approach has been seen in recent days by the Coast Guard’s pursuit of the Bella 1, a sanctioned oil tanker whose crew refused to be boarded on Sunday. The Bella 1 is the third tanker to be targeted after the U.S. took control of two other very large crude carriers, the Skipper and the Centuries.
US/INDIA (BBG): US Seeks Role in India’s Nuclear Energy on Liability Law Change
The US is willing to participate in India’s nuclear energy sector days after the South Asian nation’s Parliament passed a law limiting liability and allowing private investors to enter the industry. “The United States stands ready to undertake joint innovation and R&D in the energy sector,” the US embassy posted on social media platform X Monday. Last week, the Indian Parliament abolished the decades-old state monopoly in the nuclear power generation sector and made sweeping changes to the country’s liability provisions that had spooked investors.
FRANCE (MNI): Parliament to Pass Special Law to Maintain State Functions w/o '26 Budget
The gov't will look to pass a special law in parliament today (23 December) that will ensure the state can continue to levy taxes, borrow on financial markets, and pay public sector workers in the absence of a budget being passed for 2026. First, Minister of the Economy, Roland Lescure, and the Minister of Public Action and Accounts, Amlie de Montchalin, are in front of the Senate Finance Committee to answer their questions on the law. The National Assembly will then debate the bill from 1400CET (0800ET, 1300GMT), followed by a vote. It will then immediately move to the Senate in order to be passed before the midnight deadline set by the Constitution (23 Dec being 70 days after the first submission of the budget to parliament). Once passed by both chambers, President Emmanuel Macron can promulgate the law in the coming days before the new year.
JAPAN (BBG): Japan’s Takaichi Won’t Implement Irresponsible Tax Cuts: Nikkei
Japanese Prime Minister Sanae Takaichi says she won’t implement “irresponsible” tax cuts, speaking in an interview with Nikkei on Tuesday. Could curb new government bond issuance, noting the national debt is “still high.”
JAPAN (BBG): Japan’s Finance Minister Urges Banks to Support Regional Economy
Japan’s finance minister urged regional banks to do more to boost the local economy in a world of rising interest rates. If local financial institutions don’t make loans that support their regions, rural areas “will have no future,” Satsuki Katayama said in an interview on Monday. “That will make a huge difference.” Japan’s local economies have long been struggling with a shrinking and aging population that is much more acute than in large cities like Tokyo.
S. KOREA (BBG): BOK Warns Won Volatility, Housing Boom Increase Imbalance Risks
South Korea’s central bank flagged growing financial vulnerabilities from surging home prices and currency weakness, even as the broader financial system remains resilient amid a recovering economy. In its semi-annual report on the financial system released Tuesday, the Bank of Korea said while domestic financial institutions maintain solid capital buffers and foreign payment capacity, recent asset price swings, including equity market losses and persistent weakness in the Korean won, are keeping volatility elevated in the financial and currency market.
RBA (MNI): Board "Cautious", Inflation Persistence & Excess Demand Could Drive Hike - RBA Minutes
Rates were unchanged in December as the Board felt it needed more time to assess data to determine how persistent the pickup in inflation is. The minutes did note that the October reading increased the risks that Q4 could exceed its projections, as well as price measures in the Q3 national accounts. Importantly, the "circumstances" that would drive a hike were discussed. However, it noted a number of times that it was appropriate to be "cautious".
COLOMBIA (BBG): Colombia Declares ‘Economic Emergency’ After Tax Rises Blocked
Colombian President Gustavo Petro declared an ‘economic emergency’ after congress blocked his attempt to raise taxes. The emergency is justified by a strained fiscal position, the need for higher spending on health care and security, and the rejection of the tax bill, according to the decree published Dec. 22. The declaration allows the government to enact tax increases without congressional approval. The decree was signed by the whole cabinet. Economic emergencies are normally reserved for extraordinary crises such as earthquakes and pandemics, and it is possible that the nation’s Constitutional Court will overturn it.
THAILAND (BBG): Thailand Weighs Gold-Trade Curbs as Baht Hits Four-Year High
The Ministry of Finance and Bank of Thailand are considering new taxes and trading curbs on some gold transactions after a surge in activity was blamed for driving the baht to multi-year highs. The finance ministry is exploring a business tax for online gold transactions, Permanent Secretary Lavaron Sangsnit told an urgently convened press conference Tuesday. The central bank is also studying the imposition of trading limits on bullion trading, he said.
DATA
GERMANY DATA (MNI): Spending Slowdown in German Fiscal Data
German spending slowed in November according to Federal Ministry data out today. While a shortfall in spending relative to the budget does not come unexpected after analysts flagged implementation speed risks following the initial announcements, the current pace does underscore these risks further, which would take away from any net-positive impact on German GDP growth in the near term. The E500bln infrastructure fund took up E6.0bln of credit in its second operational month, bringing its total take-up to E18.8bln, around half of the E37bln planned for this year, with just December to go. This underscores downside risks in implementation speed which we flagged since the fund was announced.
GERMANY NOV EXPORT PRICES +0.3% Y/Y (MNI)
GERMANY NOV IMPORT PRICES -1.9% Y/Y (MNI)
EUROPE DATA (BBG): Europe Car Sales Rise in November as Budget EVs Lure Consumers
New-car registrations in Europe ticked up for a fifth straight month in November, putting the region on course for a fourth year of gains led by growth across electrified models. Buyers registered 2.4% more vehicles from a year earlier, bringing sales for the month to 1.08 million, the European Automobile Manufacturers’ Association said Tuesday. Spain and Germany recorded the biggest gains among major markets, while Italy stagnated. France and the UK posted slight declines.
SPAIN DATA (MNI): Volatile Energy Drives Sharp PPI Drop, Ex-Energy Sees Modest Growth
- SPAIN Q3 FINAL GDP +2.8% Y/Y (VS +2.9% Q2)
- SPAIN Q3 FINAL GDP +0.6% Q/Q (VS +0.7% Q2)
Spain PPI fell sharply in November, driven almost entirely by weakness in volatile energy prices, and helped lower by base effects from a strong rise in November 2024. Ex-energy, PPI showed modest growth and continuation of a much flatter trend since early 2024. PPI fell 2.5% Y/Y (vs a 0.8% rise in Oct, revised up 0.1ppt). Energy sectors were the overwhelming negative drivers. Energy PPI dropped sharply to -9.1% Y/Y (vs 2.0% Oct). INE notes this "resulted from lower prices for the production, transmission, and distribution of electricity and, to a lesser extent, for gas production and distribution of gaseous fuels, compared to the increase in November 2024."
AUSTRALIA DATA (MNI): Q4 Wages Data Mixed Following Sharp Rise in Q3 Compensation
The RBA stated as part of its December decision to leave policy on hold that while the wage price index "has eased from its peak" other "broader measures" were showing "strong growth". Many measures are quarterly and thus backward looking but Q4 monthly data to date have been mixed. November SEEK advertised salaries rose 3.8% y/y up from 3.6% and the highest since September 2024. 3-month annualized momentum picked up to 4.0% from 3.7% and has been trending higher since the August trough. Q4 average SEEK salaries rose 3.7% y/y up from Q3's 3.4% and is signaling a pickup in Q4 WPI growth, which won't be released until 18 February. This is likely to concern the RBA which is forecasting it to hold at 3.4%.
FOREX: USDJPY Pullback Extends to Over 200 Pips
- The Japanese yen rebound has gathered pace on Tuesday, helping USDJPY extending its pullback from the post BOJ highs to over 200 pips. Katayama’s more forceful warning on intervention, alongside PM Takaichi stating she will not implement irresponsible tax cuts or bond issuance, have provided a supportive yen backdrop.
- Price action this morning has shown no signs of actual intervention, with the latest leg lower more likely a result of moving back through the BOJ press conference lows at 155.85. Given the volatile moves in recent sessions, the most notable support lies further out at 154.40, the 50-day EMA. A clear breach of it would undermine the bull theme and signal scope for a deeper corrective pullback.
- Broader dollar weakness (a DXY close below 98.00 would be the first since early October) has kept upward pressure on EURUSD, which is narrowing in on the 1.18 handle, while GBPUSD has notably rallied above 1.35, edging closer to 1.3527, the Oct 1 high.
- Meanwhile, AUD and NZD continue to be well supported by positive equity sentiment, with NZD actually top of the G10 leaderboard Tuesday. NZDUSD traded through the 0.5831 Dec 11 highs, and a break above 0.5845 would mean the highest levels since September. RBA minutes showed that the board did discuss the circumstances under which it would have to pivot to interest-rate hikes in 2026 as inflation risks shift to the upside. This led AUDUSD to narrow the gap to key resistance at 0.6707, the Sep 17 high.
- Q3 US GDP highlights the data calendar for today, potentially key to the USD narrative as we approach the holiday period. US October durable goods orders / industrial production, Philly Fed Non-Manufacturing, Redbook retail sales and Canada monthly GDP are also on the calendar.
BONDS: JGB Rally & Schnabel Lend Support to EGBs & Gilts
Core global FI markets have drawn support from dovish EUR STIR repricing following late Monday comments from ECB Executive Board member Schnabel and spillover from a bid in JGBs.
- Schnabel told a FAZ podcast that "at the moment, no interest rate increase is to be expected in the foreseeable future... I didn’t say that interest rates should be raised...but rather that they shouldn’t be lowered again. That’s a very important distinction" (per Bloomberg).
- Markets price ~5bp of ECB tightening through ’26 vs. ~6.5bp early yesterday.
- Bund futures +47 at 127.43.
- Initial resistance at 127.24 is pierced, with bulls looking to break the Dec 19 high (127.52) and close Friday’s opening gap low (127.55). Ultimately, they need to break the 20-day EMA (127.91) to start to threaten the bearish trend. First support is 126.75.
- German yields 0.5-4.0bp lower. 10s further below 2.90%, 30s back below 3.50%. Curve flattens after 2s10s registered the highest close since September yesterday.
- EGB spreads to Bunds flat to 1.5bp tighter, peripheral paper & OATs outperform on the dovish STIR move.
- 70bp remains the key level to watch in both BTP/Bund & OAT/Bund spreads.
- Gilts look to global cues, futures +28 at 90.98.
- Support at 90.50 wasn’t tested during yesterday’s downtick.
- To the upside, resistance comes in at the 20-day EMA (91.17) followed by a cluster of highs (91.78 & 91.93).
- UK yields 1.5-3.0 bp lower, curve leans flatter. 2s10s ~2bp away from the November high (79.52bp) after threatening a break above yesterday.
- Little of note on the EU & UK calendar pre-Christmas, with focus on U.S. macro inputs today.
EQUITIES: Key Resistance for E-Mini S&P Marked at 7014.00, the Oct 30 High
A bull cycle in Eurostoxx 50 futures remains intact and the latest pullback appears to have been a correction. The first key support to watch lies at 5685.07, the 50-day EMA. A clear break of the EMA would highlight a potential short-term reversal. This would open 5622.00, the Nov 26 low. For bulls, sights are on key resistance at 5847.00, the Nov 13 high. The price pattern on Dec 18 is a bullish engulfing candle - a reversal signal. The recent pullback in S&P E-Minis appears to have been a correction. A key short-term support has been defined at 6771.50, the Dec 18 low. A break of this level would signal scope for a deeper retracement of the recent bull phase between Nov 21 - Dec 11. This would open 6737.71, a Fibonacci retracement. For bulls a stronger resumption of gains would refocus attention on key resistance at 7014.00, the Oct 30 high.
- Japan's NIKKEI closed higher by 10.48 pts or +0.02% at 50412.87 and the TOPIX ended 18.08 pts higher or +0.53% at 3423.25.
- Elsewhere, in China the SHANGHAI closed higher by 2.615 pts or +0.07% at 3919.979 and the HANG SENG ended 27.63 pts lower or -0.11% at 25774.14.
- Across Europe, Germany's DAX trades higher by 33.24 pts or +0.14% at 24317.1, FTSE 100 higher by 8.02 pts or +0.08% at 9874.03, CAC 40 down 17.21 pts or -0.21% at 8103.91 and Euro Stoxx 50 down 1.91 pts or -0.03% at 5741.78.
- Dow Jones mini up 25 pts or +0.05% at 48713, S&P 500 mini up 5.25 pts or +0.08% at 6935.5, NASDAQ mini up 26.75 pts or +0.1% at 25719.
Time: 10:10 GMT
COMMODITIES: Fresh Cycle Highs for Gold Reinforce Bullish Conditions
The trend condition in WTI futures remains bearish and short-term gains are considered corrective. MA studies are in a bear-mode position, highlighting a dominant downtrend. A key support and the bear trigger at $56.11, the Oct 17 low, has been breached. Clearance of this level resumes the downtrend and opens $53.77, a Fibonacci projection. Key short-term resistance to watch is $61.25, the Oct 24 high. First resistance is at $58.71, the 50- day EMA. The trend structure in Gold is unchanged, it remains bullish and another fresh cycle high reinforces current conditions. The break higher confirms a resumption of the primary uptrend. The metal has traded through the psychological $4400.0 handle and this opens $4500.0 next, ahead of $4536.0, a Fibonacci projection. Initial firm support to watch lies at $4259.9, the 20-day EMA. A pullback would be considered corrective.
- WTI Crude up $0.02 or +0.03% at $58.05
- Natural Gas up $0.01 or +0.35% at $3.979
- Gold spot up $39.53 or +0.89% at $4483.5
- Copper up $3.4 or +0.62% at $554.35
- Silver up $0.52 or +0.75% at $69.5745
- Platinum up $50.94 or +2.39% at $2181.47
Time: 10:10 GMT
| Date | GMT/Local | Impact | Country | Event |
| 23/12/2025 | 1200/0700 | ** |  BR | Brazil Preliminary CPI |
| 23/12/2025 | 1330/0830 | *** |  CA | Gross Domestic Product by Industry |
| 23/12/2025 | 1330/0830 | ** |  US | Philadelphia Fed Nonmanufacturing Index |
| 23/12/2025 | 1330/0830 | *** | US | GDP / PCE Quarterly |
| 23/12/2025 | 1330/0830 | ** | US | Durable Goods New Orders |
| 23/12/2025 | 1355/0855 | ** | US | Redbook Retail Sales Index |
| 23/12/2025 | 1415/0915 | *** | US | Industrial Production |
| 23/12/2025 | 1500/1000 | ** | US | Richmond Fed Survey |
| 23/12/2025 | 1500/1000 | *** | US | Conference Board Consumer Confidence |
| 23/12/2025 | 1630/1130 | ** | US | US Treasury Auction Result for 52 Week Bill |
| 23/12/2025 | 1800/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 23/12/2025 | 1800/1300 | ** | US | US Treasury Auction Result for 2 Year Floating Rate Note |
| 23/12/2025 | 1800/1300 | * | US | US Treasury Auction Result for 5 Year Note |
| 23/12/2025 | 1830/1330 | CA | Bank of Canada meeting minutes | |
| 24/12/2025 | 1200/0700 | ** | US | MBA Weekly Applications Index |
| 24/12/2025 | 1330/0830 | *** | US | Jobless Claims |
| 24/12/2025 | 1530/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 24/12/2025 | 1530/1030 | ** | US | US DOE Petroleum Supply |
| 24/12/2025 | 1630/1130 | ** | US | US Treasury Auction Result for 7 Year Note |
| 24/12/2025 | 1700/1200 | ** | US | Natural Gas Stocks |
