EM ASIA CREDIT: Westpac Banking Corporation: New USD priced

The overnight range was 104.06 - 104.71, Asia is currently trading around {AUDJPY Curncy}. The pair continues to grind higher on strong momentum as risk rallies into year-end aided by a strong US GDP print overnight. The dip yesterday below 104.00 was well supported. On the day, I suspect this price action will continue as risk marches higher. The first support is back toward the 103.70-104.00 area where I suspect buyers will be looking to engage looking for a test of the 105.00 area at some point.

• The AUD/JPY Average True Range(ATR) for the last 10 Trading days: 70 Points

Fig 1: AUD/JPY spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

The S&P(ESH6) overnight range was 6913.25 - 6963.75, SPX closed +0.46%, Asia is currently trading around {ESA Index}. The futures started the week strongly and a strong GDP print added tailwinds to the Santa rally which looks set to continue into the year-end. This morning futures have opened a little lower, E-minis(S&P) -0.05%, NQZ5 -0.05%. I continue to be wary of stocks up here but it is very tough to try and fight this price action for the moment as it looks to break higher amid lower participation and liquidity. On the day in the (ESH6) futures, support now lies toward 6870-6900 as the market begins to eye a move above the highs to challenge the 7000 area into year-end. 

• Bloomberg - “More than $2 trillion in US IG debt sales will hit the market next year, according to Morgan Stanley strategists. The record issuance is expected to be driven by AI expansion, debt refinancing and M&A.”
• Mohamed A. El-Erian on X: “The private credit explosion continues: According to the Financial Times, “private credit firms snapped up nearly 14 times as much consumer debt this year as in 2024, piling into riskier areas such as credit cards and buy now, pay later debt.”
• “The Optimistic View: These firms, who invest overwhelmingly in advanced countries, are increasingly substituting for traditional banks. By moving this debt off bank balance sheets, they could potentially lower overall systemic risk—acting as a diversified "shock absorber" for the financial system.”
• “The Skeptical View: Private credit is expanding into riskier areas that sit outside their traditional expertise and where they lack a comparative advantage. Unlike their bespoke corporate activities, consumer debt requires different risk-modeling "muscles" while less amenable to their value add.”
• The S&P 500 Index Average True Range(ATR) for the last 10 Trading days:  63 Points

Fig 1: S&P 500 Index Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

• MNI: JAPAN NOV SERVICES PPI +2.7% Y/Y; OCT UNREV +2.7%
• JAPAN NOV SERVICES PPI +0.4% M/M: OCT UNREV +0.6%