GBPUSD TECHS: Remains Below Recent Highs
- RES 4: 1.2667 High May 27
- RES 3: 1.2599 High Jun 7
- RES 2: 1.2506 1.382 proj of the Sep 26 - Oct 5 - Oct 12 price swing
- RES 1: 1.2446 High Dec 14 and the bull trigger
- PRICE: 1.2173 @ 19:15 GMT Dec 16
- SUP 1: 1.2119 20-day EMA
- SUP 2: 1.2107 Low Dec 7 and a key support
- SUP 3: 1.2054/1901 Low Dec 1 / Low Nov 30
- SUP 4: 1.1872 50-day EMA
Trend conditions in GBPUSD remain bullish, however, last Thursday’s strong sell-off signals a possible short-term top. Attention is on the first key support at 1.2107, the Dec 7 low. Clearance of this level would pave the way for a move towards 1.1901, the Noc 30 low. On the upside, key short-term resistance has been defined at 1.2446, the Dec 14 high. A turn higher and a break of this hurdle, would confirm a resumption of the uptrend.
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US: Recession Set To Start Earlier Than Consensus Expects? (2/2)
The bottom line: the Conference Board eyes a recession starting around end-2022, lasting through mid-2023.
- That's an earlier start (and end) than eyed by consensus which mostly sees a (mild) recession beginning mid-to-late 2023.
- The 6-month annualized change in the LEI is flashing up warning signals: the chart below shows the current rate of change (-6.3%) as the x-axis; this has historically been a reliable recession signal, with no "false positives".
- An earlier recession would -at the very least - call into question whether the terminal rate can get to 5% by mid-2023 as is currently priced in.
Source: Conference Board, NBER
US: Leading Index Eyes Recession Starting Soon (1/2)
The October reading of the Conference Board's Leading Economic Index fell by 0.8% (below the -0.4% expected), marking a 3.2% decline in the 6-month span since April and an 8th straight drop.
- While financial market indicators are pointing to an economic slowdown, the persistent weakness in the Conf Board LEI is down to non-financial factors - see chart below.
- The biggest contributor to the decline (both in Oct and since Apr) has been in consumer expectations, with ISM New Orders and building permits (which we've flagged multiple times as an important and increasingly concerning leading indicator) also contributing heavily.
Source: Conference Board
US: State Department Press Conference Underway Shortly
US State Department Deputy Spokesperson Vedant Patel is shortly due to provide a press conference from the Department of State.
- Livestream: https://www.state.gov/todays-briefing-schedule/
- Comes as the State Department confirms that de facto Saudi leader Crown Prince Mohammed bin Salman will be granted diplomatic immunity in a civil case brought against him for his role in the killing of Saudi dissident journalist Jamal Khashoggi.
- A court filing made by Justice Departmentat the request of the State Department reads: “Mohammed bin Salman, the Prime Minister of the Kingdom of Saudi Arabia, is the sitting head of government and, accordingly, is immune from this suit.”
