NZD: NZD/USD - Treads Water Around 0.5750

On the asset side of the Fed balance sheet, we saw a $25B drop in assets, of which just $2B could be attributed to QT in one of its final weeks (ends Dec 1).

• Instead it was a $6B drop in dealer repo operations vs a week earlier, and $17B in "other" areas that aren't related directly to monetary policy and typically don't have any significant impact on the size of the balance sheet (such changes are largely due to items such as bank premises, accrued interest, and other accounts receivable.)
• Discount window takeup edged up $0.3B to $6.1B but remains relatively low.
• QT has totaled just under $21B over the last month, around the expected pace, though as noted this will flatline in December with a pickup in net bills as MBS proceeds are rolled over into T-bills.

A Thanksgiving-condensed week sees data highlights from delayed retail sales and PPI reports for September on Tuesday (Nov 25) before a Wednesday release for weekly jobless claims (Nov 26). Aside, the Fed’s Beige Book should also offer another important update on Wednesday for latest liaison reporting, with no Fedspeak currently scheduled around the holiday and the FOMC media blackout due to start on Saturday, Nov 29. 

• As we regularly comment in this weekly publication, Redbook and Chicago Fed CARTS indicators point to solid nominal growth in retail sales, something broadly reflected in analyst consensus for the release.
• PPI inflation will offer a useful albeit not overly timely update on input cost pressures.
• Jobless claims will be watched particularly closely, both for latest initial claims for signs of layoffs and a notable update for continuing claims. The latter covers the payrolls reference period for November and will be an important reference point for FOMC members trying to get a sense of latest unemployment rate clues with the next payrolls reports coming after the Dec 9-10 FOMC decision (going into it with this week’s 0.12bp rise to 4.44% back in September). 

• RES 4: 1.4200 Round number resistance 
• RES 3: 1.4177 Channel top drawn from Jul 23 low
• RES 2: 1.4140/67 High Nov 5 / 50.0% of the Feb 3 - Jun 16 bear leg
• RES 1: 1.41131 High Nov 21  
• PRICE: 1.4121 @ 16:25 GMT Nov 21
• SUP 1: 1.4031/3977 20- and 50-day EMA values
• SUP 2: 1.3904 Bull channel base drawn from the Jul 23 low
• SUP 3: 1.3888 Low Oct 29 and a key support 
• SUP 4: 1.3833 Low Sep 24  

USDCAD rallied further Friday, undermining a bear theme. A continuation higher would expose 1.4140, the Nov 5 high and the next notable resistance. Note too that the top of the bull channel, drawn from the Jul 23 low, is at 1.4181 and also represents a key resistance. For bears, key support to watch lies at 1.3977, the 50-day EMA. A clear breach of the average would expose the base of the channel at 1.3904.