<p>The US major indices are closing higher on the day and for the week. All the major indices are closing with gains over 2% on the day. For the week the gains are from around 1% to 1.5% for the major indices.</p><p>The final numbers are showing:</p><ul><li>Dow industrial average rose 700.53 points o 2.13% at 33630.62</li><li>S&P rose 86.98 points or 2.28% at 3895.07</li><li>Nasdaq rose 264.06 points or 2.56% at 10569.30</li><li>Russell 2000 or small caps rose 39.60 or 2.26% at 1792.799</li></ul><p>For the trading week, the gains for the major indices are showing:</p><ul><li>Dow rose 1.46%</li><li>S&P rose 1.45%</li><li>Nasdaq rose 0.98%</li><li>Russell 2000 rose 1.79%</li></ul><p>Technical look at the S&P</p><p>A month ago, after the NFP rally on December 2 which saw the S&P close at 4071, the „Monday After“, gapped lower and traded down to test the then rising 200 hour MA on Tuesday. That MA was around 3818. The price stalled at that 200 hour MA and moved back higher. </p><p>Then on CPI day on Tuesday, December 13, the price gapped higher after the better than expected CPI and reached a high of 4100.96 soon after the open. Remember CPI came in better than expected at 0.1% vs 0.3%. The stocks then rotated lower with momentum increasing to the downside. It was a disappointing reaction to the better than expected <a target=“_blank“ href=“https://www.forexlive.com/terms/i/inflation/“ target=“_blank“ id=“ad51a5a2-1afc-4f42-9e62-ea6faf6f90fa_1″ class=“terms__main-term“>inflation</a> report. </p><p>On Thursday of that week (December 15), the price gapped below the 200 hour MA (green MA line), and did not look back as selling intensified. The low reached 3764.49 on Thursday December 22. The move from the CPI high to the December 22, low was -8.7%.</p><p>Fast forward to today, and the price is working it’s way back to familiar 200 hour MA. The high price today reached 3906, which was just short of the 200 hour MA level at 3910.32. </p><p>That MA is within 8 points of the 200 hour MA that stalled the fall back on December 6th – the Tuesday after December jobs report. </p><p>Monday will be interesting for the US stocks to see if the price can move above the 200 hour MA, and start to trade with a more bullish bias for the first time since December 14th – the day after the CPI. </p><p>If it can move above the 200 hour MA, the market will then look toward the upcoming CPI – which will be released next Thursday, January 12. </p><p>The expectation for CPI is for the MoM to come in at 0.0% (vs 0.1% last month). The Core is expected at 0.3% vs 0.2%. The headline CPI YoY is expected to come down to 6.5% from 7.1%. </p><p>If MoM CPI does come in at 0.0%, the last 6 months would have averaged 0.0167% per month, or 2.0% for 6 months. That is the Fed’s target rate. </p><p>Admittedly, the core is still higher. Given the expected 0.3%, the 6 month average would be 0.038% per month or annualized to 4.6% for the year. However, there are things like rents that will keep that higher than expectations. </p><p>The point is, if CPI comes in for 6 months at 2.0%, it may be enough to kick the <a target=“_blank“ href=“https://www.forexlive.com/terms/s/stock-market/“ target=“_blank“ id=“a514f531-bd0e-42a8-a767-04667312e984_1″ class=“terms__secondary-term“>stock market</a> back toward the 4100 That is what the market will decide next week, but first things first, will be can the 200 hour MA be broken? </p>

This article was written by Greg Michalowski at www.forexlive.com.

<ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-december-non-farm-payrolls-223k-vs-200k-expected-20230106/“>US December non-farm payrolls +223K vs +200K expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/ism-december-us-services-496-vs-550-expected-20230106/“>ISM December US services 49.6 vs 55.0 expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-factory-orders-for-november-18-versus-08-estimate-20230106/“>US factory orders for November -1.8% versus -0.8% estimate</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/canada-december-employment-change-1040-vs-80k-estimate-20230106/“>Canada December employment change 104.0K vs 8.0K estimate</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-cook-recent-data-suggest-worker-compensation-is-starting-to-decelerate-20230106/“>Fed’s Cook: Recent data suggest worker compensation is starting to decelerate</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-bostic-todays-jobs-data-does-not-change-my-outlook-20230106/“>Fed’s Bostic: Today’s jobs data does not change my outlook</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-bostic-holiday-shopping-numbers-could-influence-fomc-decision-20230106/“>Fed’s Bostic: Holiday shopping numbers could influence FOMC decision</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-bostic-the-us-economy-is-definitely-slowing-20230106/“>Fed’s Bostic: The US economy is ‚definitely slowing'</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-george-renewed-inflation-pressures-from-energy-crop-prices-a-very-real-risk-20230106/“>Fed’s George:: Renewed inflation pressures from energy, crop prices a very real risk</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-barkinus-central-banks-more-gradual-interest-rate-paths-should-limit-harm-to-economy-20230106/“>Feds Barkin:US central banks more gradual interest rate paths should limit harm to economy</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/the-bank-of-japan-is-considering-revising-its-inflation-forecasts-upward-report-20230106/“>The Bank of Japan is considering revising its inflation forecasts upward – report</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/the-audusd-moves-back-tot-the-200-day-ma-20230106/“>ECB’s Lane: If there is a recession underway, it is at the mild end</a></li></ul><p>Markets:</p><ul><li>Gold up $34 to $1867</li><li>US 10 year yields down 17 bps to 3.55%</li><li>WTI crude oil flat at $73.67</li><li>S&P 500 up 95 points to 3924</li><li>NZD leads, USD lags</li></ul><p>We’re only four days into 2023 trading and we’ve already had some twists and turns, including some big ones today.</p><p>The dollar was strong heading into non-farm payrolls in an indication that market participants had been swayed by this week’s ADP report and were leaning towards a stronger headline. Indeed the headline came in stronger and with a drop in unemployment but the market instead focused on significantly slower wage growth and the reaction was dovish, with the US dollar sagging.</p><p>However that reaction didn’t last long. US equities opened strong but quickly gave back all the gains and some risk aversion kicked in sending EUR/USD down to 1.0510 from 1.0544 at the post-jobs peak. Other pairs also experienced varying degrees of retracements.</p><p>The final big twist came on a terrible ISM services report. That’s a forward-looking indicator and it gave the market confidence that the Fed is nearing the end of the line with hikes. Treasury yields crumbled alongside the dollar and from 1.0510 the euro rallied all the way to 1.0646.</p><p>The USD/JPY range was also extremely wide today from 134.77 just before non-farm payrolls all the way down to a late-day session low of 132.07.</p><p>The loonie was also in focus as USD/CAD rallied early in the day to 1.3650 then tumbled to 1.3439 because of an extremely strong Canadian jobs report. Pricing now suggests an additional 25 bps hike from the BOC later this month. Notably, CAD significantly underperformed its commodity cousins despite the strong report. Some of that is China-leverage for the antipodeans but there’s also the growing risk that the BOC overtightens and housing/consumer spending collapses.</p><p>Have a great weekend.</p>

This article was written by Adam Button at www.forexlive.com.

<p>The USDCHF opened the week below the 100 hour MA (blue line in the chart above). On Tuesday, the price soared higher reaching the 50% of the move down from the November 21 high. That level comes in at 0.93988. </p><p>On Wednesday, the price tumbled back down and in the process moved briefly back below the 200 and 100 hour MAs (green and blue lines), but closed above the MA levels. </p><p>ON Thursday after falling back below the MAs again, the price once again snapped higher reaching a new high for the week ahead of the jobs report today. </p><p>The jobs report and the ISM Non-manufacturing sent the pair tumbling once again. The price is back below the 100 hour MA at 0.9316 and the 200 hour MA at 0.9287. The low reached 0.9271.</p><p>So for the week, there were higher lows each successive day (red numbered circles). On Tuesday, the high was the highest going back to December 8th . Then today, the high again made a new high going back to December 8th before the tumble lower.</p><p>With the price below the hourly MAs, the sellers hold the „best hand“ and control (below 0.92872 is close risk – 200 hour MA). The next targets are the low from yesterday and Wednesday at 0.92597 and 0.92526 respectively. Then traders will look toward the extremes seen over the last month of trading. </p><p>What would spoil the fun?</p><p>Start by moving above the 200 hour MA and then the 100 hour MA. That would not be a good look for the sellers from a technical perspective. </p>

This article was written by Greg Michalowski at www.forexlive.com.

<p>Today’s jobs report showed the Canadian economy adding 104K jobs in December, far more than the 5K consensus.</p><p>That follows a strong November CPI report and has the OIS market pricing in a 72% chance of another 25 bps hike at the January 25 meeting. CIBC shifted its call to a 25 bps hike after the data.</p><p>“The Canadian labour market remains much stronger than expected and (so far) apparently
resilient to rapidly rising interest rates. While strong hiring at least partly reflects companies needing to compensate for
increased staff absenteeism, the tick down in the unemployment rate close to its record low sees us now forecasting a
final 25bp hike from the Bank of Canada at its meeting later this month.“</p><p>They are slightly confused by the report with 35K jobs gains in construction in a sector that’s undoubtedly suffering from the housing downturn. Hours worked were also only up 0.1% despite the jump in jobs.</p><p>USD/CAD today has fallen 89 pips to 1.3433 though that’s only about half the gain of NZD and AUD.</p>

This article was written by Adam Button at www.forexlive.com.

<p>The 13th vote has started and Biggs, Boebert and Crane already voting for Jordan, but they did not nominate Herns or Jordan. </p><p>Donald switched to McCarthy during the last vote. </p><p>Herns – who Boebert nominated – voted for McCarthy. So he is not all-in and probably asked not to be nominated. </p><p>Jordan has said he does not want to be nominated. </p><p>Gaetz will likely vote against McCarthy.</p><p>The final 7 are:</p><ul><li>Biggs</li><li>Boebert</li><li>Crane</li><li>Gaetz</li><li>Good</li><li>Harris</li><li>Rosendale</li></ul><p>UPDATE: Gaetz and Good voted for Jordan bringing total to 5. Appears McCarthy lost the 13th vote.</p><p>Harris did switch to McCarthy, however. </p><p>It is Friday, so imagine there will be a lot of pressure exerted on the others to get this over before the weekend (after all, its the weekend), but I can see the remain-ers getting their last pieces of flesh. Will McCarthy be willing to give more, however?</p><p>/<a target=“_blank“ href=“https://www.forexlive.com/terms/i/inflation/“ target=“_blank“ id=“ad51a5a2-1afc-4f42-9e62-ea6faf6f90fa_1″ class=“terms__main-term“>inflation</a></p>

This article was written by Greg Michalowski at www.forexlive.com.

<p style=““ class=“text-align-justify“>Alongside the yen, the pound is a notable laggard today as cable falls further following a breakdown yesterday below 1.2000. The drop also took out support from the 23.6 Fib retracement level of the swing higher since September, seen at 1.1953. That gives sellers with more scope to chase a further downside move – potentially looking at the 100-day moving average (red line) next at 1.1663.</p><p style=““ class=“text-align-justify“>But of course, any further downside leg requires vindication from the US data later today. That will be key for dollar sentiment as the new year finally looks to get rocking.</p><p style=““ class=“text-align-justify“>Elsewhere, EUR/USD is down 0.2% to 1.0500 while AUD/USD is also down 0.2% to 0.6732 at the lows for the day. The latter is continuing to see a rejection of its 200-day moving average play out for now.</p><p style=““ class=“text-align-justify“>In broader markets, equities are tentative with S&P 500 futures flat and Treasury yields are also mostly little changed at the long-end of the curve so far today.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Today’s inflation data is quite positive</li><li>Rates are to rise to the point that it will restore inflation back to 2% target</li></ul><p style=““ class=“text-align-justify“>He is one of the few to mention any talk about a top in terms of the tightening cycle. The others tend to steer clear of any clear line/area when it comes to the supposed terminal rate. As for his take that the inflation data today is „quite positive“, he probably should take a look at the core reading. Pfft.</p>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>While the headline annual inflation declined more than estimated, as was the case with the German, French, and Italian readings this week, core annual inflation actually jumped higher in December as seen <a target=“_blank“ href=“https://www.forexlive.com/news/eurozone-december-preliminary-cpi-92-vs-97-yy-expected-20230106/“ target=“_blank“ rel=“follow“>here</a>.</p><p style=““ class=“text-align-justify“>That will offer the ECB no respite in their fight against inflation, with rising price pressures becoming more embedded in other parts of the economy. As mentioned yesterday, such tentative signs of slowing inflation (via the headline) <a target=“_blank“ href=“https://www.forexlive.com/news/tentative-signs-of-slowing-inflation-not-going-to-change-the-ecbs-mind-20230105/“ target=“_blank“ rel=“follow“>isn’t going to change the ECB’s mind</a> – at least not yet.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Economic confidence 95.8 vs 94.7 expected</li><li>Prior 93.7</li><li>Industrial confidence -1.5 vs -1.2 expected</li><li>Prior -2.0</li><li>Services confidence 6.3 vs 3.5 expected</li><li>Prior 2.3</li></ul><p style=““ class=“text-align-justify“>Amid a better economic showing during the winter, helped by milder weather conditions, euro area economic sentiment improved but the outlook remains subdued as recession risks are still on the cards. Of note, consumer inflation expectations declined further to 23.7 in December – down from 30.1 in November.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Prior -1.8%</li></ul><p style=““ class=“text-align-justify“>Euro area retail sales picked up by more than expected in November, owing to more sales of fuel at petrol stations. That comes as energy prices come off further in the region amid milder weather conditions during the winter.</p>

This article was written by Justin Low at www.forexlive.com.