<p class=“MsoNormal“>The S&P500 has been on an uptrend for 2 months now, which got amplified by the miss in the US CPI in November and unleashed a FOMO type rally out of it. </p><p class=“MsoNormal“>This “bear market rally” recently run into a strong technical year-long trendline and got some news against the narrative that supported the rally. This narrative was based on bad economic data in hope of a less aggressive Fed and earlier pause in their tightening cycle. </p><p class=“MsoNormal“>S&P500 Awaiting Key US Data</p><p class=“MsoNormal“>Tuesday: US CPI.</p><p class=“MsoNormal“>Wednesday: FOMC Policy Decision</p><p class=“MsoNormal“>We saw the uptick in the unemployment rate, the US Manufacturing PMI in free fall and the Fed signalling a slower pace of hikes beginning in December with a 50 bps move instead of 75 bps that they adopted for four consecutive times. </p><p class=“MsoNormal“>Finally, the US CPI report in November surprisingly missed expectations and prompted the market to expect an earlier pause from the Fed as the recessionary signals from the leading indicators may be finally showing signs in the lagging ones. </p><p class=“MsoNormal“>Recently though, the market got hit by <a target=“_blank“ href=“https://www.forexlive.com/terms/e/economic-data/“ target=“_blank“ id=“ed1b62b3-5e5b-4a70-82dc-4a13e98beda8_2″ class=“terms__main-term“>economic data</a> that show a resilience in the economy. In fact, after the huge intraday rally caused by a less hawkish than expected Fed Chair Powell speech, the US NFP report surprised beating expectations on jobs created and on the inflationary side higher than expected wages with previous figures revised upwards. </p><p class=“MsoNormal“>Some days later the ISM Services PMI beat expectations with prices paid sub-index remaining high. Finally, the US PPI report beat expectations and may make the market to err on the defensive ahead of the CPI report on Tuesday. Below you can see all the catalysts in the 1-hour S&P500 Futures chart.</p><p class=“MsoNormal“>S&P500 Technical Analysis</p><p class=“MsoCaption“>Recent two weeks of price action and catalysts on the S&P500 on tradingview.com</p><p class=“MsoNormal“>On the technical side the price has run into a year-long downward trendline that acted as resistance and started a fall breaking the 2 month-long upward trendline as the risk sentiment soured after the NFP and ISM data. After rebounding from the support in the 3920-3940 area, the price retested the broken trendline and got rejected as the US PPI data beat expectations. </p><p class=“MsoNormal“>Looking at the daily chart below we can see that the 3920-3940 area is also the neckline of the head and shoulders pattern and a breakout to the downside may see further sell-off, but we may need to wait for the US CPI and FOMC to have a clearer picture. </p><p class=“MsoCaption“>Daily chart of the S&P500 on <a target=“_blank“ href=“https://www.tradingview.com“ target=“_blank“ rel=“follow“>tradingview.com</a></p><p class=“MsoNormal“>If the two risk events come out on the hawkish side, then we will most likely see the price breaking down and resuming the downtrend and at this point waving goodbye to the hoped Santa Claus rally. </p><p class=“MsoNormal“>Otherwise, in case the US CPI report again misses expectations and the FOMC policy decision comes out as expected or even on the less hawkish side, then we may see the price rally again and possibly reach the 4320 level. </p>

This article was written by ForexLive at www.forexlive.com.

<ul><li>Domestic sight deposits CHF 510.8 bn vs CHF 518.0 bn prior</li></ul><p style=““ class=“text-align-justify“>Overall sight deposits continue to decline ahead of the SNB policy decision this week, in which the central bank is likely to announce a 50 bps rate hike (though with a risk that it could end up being just 25 bps). That will likely play into more policy adjustments involving sight deposits as outlined <a target=“_blank“ href=“https://www.forexlive.com/news/whats-behind-the-sudden-plunge-in-snb-sight-deposits-20221017/“ target=“_blank“ rel=“follow“>here</a> previously.</p>

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

<p>The week is finally here. </p><p>The US CPI will kickstart the markets on Tuesday and that will transition into the Fed decision on Wednesday. Then when that is done, the SNB, BOE and ECB will all announce their interest rate decisions on Friday before the transition into the year end. </p><p>To better prepare, it is important to understand the key levels in play from a risk and bias defining perspective. </p><p>In this weekend report, Greg Michalowski of Forexlive speaks to the key fundamental events and then outlines the technical levels in play for the major currency pairs vs the USD. He also looks at the S&P, Nasdaq and 10 year yield and what those charts are telling traders technically.</p><p>Below are the currencies and instruments covered along with the start times. </p><ul><li>EURUSD: 4:46</li><li>USDJPY 10:50</li><li>GBPUSD 13:40</li><li>USDCHF 15.57</li><li>USDCADS 17:58</li><li>AUDUSD 19:10</li><li>NZDUSD 21:02</li><li>S&P 23:21</li><li>Nasdaq 24:22</li><li>10 year yield 24:46</li></ul>

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

<p>Bank of Japan monetary policy board member Hajime Takata in an interview with Japan’s Nikkei newspaper published on Saturday.</p><ul><li>Japan’s economy is not yet in a phase where the central bank can end yield curve control (YCC)</li><li>too soon to start a discussion about concrete methods of ending yield curve control</li><li> careful messaging would be needed when the time comes </li></ul><p>Takata acknowledged that risks have built due to the prolonged period of ultra-easy policy.</p><p>-</p><p>Takata is basically saying the same as Bank of Japan Governor Kuroda. Kuroda has repeated time and again that current policy is appropriate. This f<a target=“_blank“ href=“https://www.forexlive.com/centralbank/boj-governor-kuroda-says-its-too-early-to-discuss-specifics-on-the-banks-policy-framework-20221206/“ target=“_blank“ rel=“follow“>rom just last week</a>:</p><ul><li>when achieving the inflation target comes in sight the BOJ will likely debate a path towards an exit from easy monetary policy</li><li>at present, though, the benefits of current monetary easing outweighs the costs</li></ul><p>It pays to be aware that there is some murmuring in Japan about trimming back easy policy. From senior officials. As an example:</p><ul class=“text-align-start vertical-align-baseline“><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/bojs-tamura-says-policy-should-be-reviewed-says-2-cpi-goal-may-be-too-high-for-japan-20221201/“ rel=“follow“ target=“_blank“ class=“article-link“>BOJ’s Tamura says policy should be reviewed, says 2% CPI goal may be too high for Japan</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/possible-boj-kuroda-replacement-says-the-bank-should-review-its-policy-20221209/“ target=“_blank“ rel=“follow“>Possible BOJ Kuroda replacement says the Bank should review its policy</a></li></ul><p>-</p><p>While an exit from YCC or any other leg of Japan’s current ultra-loose monetary policy is not imminent, its something to watch out for in the new year, most likely some time after Q1. Governor Haruhiko Kuroda’s finishes in April 2023. New blood could bring new ideas. The JPY is seeing a headwind from current policy, especially as most other DM central banks jack rates higher. A change to YCC or any of the other planks of easy policy would be yen supportive, at the margin.</p><p>Bank of Japan monetary policy board member Hajime Takata. Takata is one of two new board members appointed under Prime Minister Kishida.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.

<ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-november-ppi-74-vs-72-yy-expected-20221209/“ target=“_blank“>US November PPI +7.4% vs +7.2% y/y expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/umich-us-december-prelim-consumer-sentiment-591-vs-569-expected-20221209/“ target=“_blank“ draggable=“false“>UMich US December prelim consumer sentiment 59.1 vs 56.9 expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/putin-we-will-think-about-oil-output-cuts-20221209/“ target=“_blank“>Putin: We will think about oil output cuts</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/baker-hughes-us-oil-rig-count-2-20221209/“ target=“_blank“>Baker Hughes US oil rig count -2</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/could-bank-of-americas-ceo-leave-his-job-to-be-treasury-secretary-20221209/“ target=“_blank“>Could Bank of America’s CEO leave his job to be Treasury Secretary?</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/atlanta-fed-q4-gdpnow-tracker-32-vs-34-prior-20221209/“ target=“_blank“>Atlanta Fed Q4 GDPNow tracker +3.2% vs +3.4% prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-october-wholesale-inventories-05-vs-08-expected-20221209/“ target=“_blank“>US October wholesale inventories +0.5% vs +0.8% expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/chinas-xi-advocates-for-yuan-settlement-of-oil-and-gas-trade-with-gulf-states-20221209/“ target=“_blank“ draggable=“false“>China’s Xi advocates for yuan settlement of oil and gas trade with Gulf states</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/german-governments-public-deficit-will-be-much-higher-in-2023-than-previously-thought-20221209/“ target=“_blank“ draggable=“false“>German government’s public deficit will be much higher in 2023 than previously thought</a></li></ul><p>Markets:</p><ul><li>Gold up $6.50 to $1795</li><li>US 10-year yields up 9.6 bps to 3.59%</li><li>WTI crude oil flat at $71.45 after touching $70.06</li><li>S&P 500 down 0.7%</li><li>NZD leads, CAD lags</li></ul><p>The dollar tried to rally on a hot PPI number for the second month in a row but the skeptics one the day as a brief 75-pip rally in USD was quickly wiped out. The UMich numbers also prompted a rally in USD/JPY and some smaller moves elsewhere but that also didn’t last. The led to some further dollar selling but late in the day there was a paring of those moves as stocks sagged.</p><p>At the end of the day, the moves that are left were mostly minor.</p><p>The larger drama was in the oil market where there was a sixth consecutive day of losses for crude. There had been some gains after tough talk from Putin but a closer look at the comments showed a less-aggressive stance than the headline. WTI tried to break $70.00 and came close but couldn’t break through and that led a quick rebound to the upside and flat trade on the day.</p>

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

<p>It was a tough one for US equities this week and it ended on a soft note after a back-and-forth session. Today’s hot PPI number and better UMich sentiment raised some questions about whether Fed hikes are working enough to cool inflation and whether Powell could take a hawkish stand next week. I think he’s instead going to push the idea that the Fed will hold rates high for longer rather than the U-turn that’s priced into Fed funds.</p><p>In any case, expect some even bigger moves next week.</p><p>On the day:</p><ul><li>S&P 500 -0.75%</li><li>Nasdaq -0.7%</li><li>Russell 2000 -1.0%</li></ul><p>On the week:</p><ul><li>S&P 500 -3.4%</li><li>Nasdaq -4.0%</li><li>Russell 2000 -4.9%</li></ul>

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

<p>The NZD/JPY weekly chart is one of the more-interesting ones out there right now as it brushes up against the September high. If that breaks, it will take the pair all the way back to 2015 levels and a time when the pair touched 94.00.</p><p>The general feeling is that yen weakness is over after the spike in USD/JPY to 150.00 but this chart and some others argue that USD weakness is more the case.</p><p>Lately, the antipodean currencies are benefiting from speculation around China reopening and AUD/JPY also posted a decent week.</p><p>The rise in the pair is also reminiscent of the old carry trade. The RBNZ cash rate is now at 4.25% and another 50 bps is expected in February. That’s a hefty carry over zeroed out JPY rates, though risks around global economic growth are high.</p>

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

<p>The one-year oil curve fell into contango today as front-month prices continued to crumble. I think the focus on the curve structure is overdone, especially with uncertainty about China’s reopening timeline, but that likely kicked off a final press towards $70.</p><p>Bidders just above $70 finally stepped in, some perhaps on hopes for an OPEC leak or Russian action on the weekend. The low was $70.06 and it has quickly rallied to $71.50.</p><p>$70 is also more than just a big round number. US officials have indicated that the want to refill the SPR around $70 and that may act as support.</p>

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

<ul><li><a target=“_blank“ href=“https://www.forexlive.com/Orders/update-fx-option-expiries-for-09-december-2022-at-the-10am-new-york-cut-20221209/“ target=“_blank“>UPDATE – FX option expiries for 09 December 2022 at the 10am New York cut</a>rordeeck_box_outline_nk</li><li><a target=“_blank“ href=“https://www.forexlive.com/Education/bitcoin-hits-the-ceiling-20221209/“ target=“_blank“>Bitcoin hits the ceiling</a>rerderheck_box_outline_bank</li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecb-says-banks-to-repay-eur-447bn-of-tltro-funds-early-20221209/“ target=“_blank“>ECB says banks to repay EUR 447bn of TLTRO funds early</a>eorderchck_box_outline_blnk</li><li><a target=“_blank“ href=“https://www.forexlive.com/news/tass-reports-on-a-meeting-between-russia-and-the-us-in-istanbul-today-20221209/“ target=“_blank“>TASS reports on a meeting between Russia and the US in Istanbul today</a>reoderchec_ox_outline_blnk</li><li><a target=“_blank“ 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November</a>r</li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/boe-uk-inflation-expectations-survey-48-vs-49-prior-20221209/“ target=“_blank“>BoE UK inflation expectations survey: 4.8% vs. 4.9% prior</a>re</li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/riksbanks-jansson-important-that-inflation-is-back-on-target-by-end-23-start-24-20221209/“ target=“_blank“>Riksbank’s Jansson – important that inflation is back on target by end ’23 start ’24</a>r</li><li><a target=“_blank“ href=“https://www.forexlive.com/news/tesla-tsla-to-reduce-output-in-december-by-around-30-from-november-for-model-y-20221209/“ target=“_blank“>Tesla (TSLA) to reduce output in December by around 30% from November for Model Y</a>rnk</li><li><a target=“_blank“ href=“https://www.forexlive.com/news/taiwan-chipmaker-tsmc-says-november-net-revenue-up-50-yy-20221209/“ target=“_blank“>Taiwan chipmaker TSMC says November net revenue up 50% y/y</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/opec-crude-output-fell-700000-bd-in-november-the-sharpest-drop-since-april-20221209/“ target=“_blank“>OPEC+ crude output fell 700,000 b/d in November, the sharpest drop since April</a>r</li><li><a target=“_blank“ href=“https://www.forexlive.com/news/ft-says-china-is-starting-to-under-report-coronavirus-case-and-fatality-data-20221209/“ target=“_blank“>FT says China is starting to under-report coronavirus case and fatality data</a>e</li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-moving-higher-against-gbp-aud-nzd-cad-yen-to-a-lesser-extent-eur-not-much-changed-20221209/“ target=“_blank“>US moving higher against GBP, AUD, NZD, CAD (yen to a lesser extent, EUR not much changed)</a>ank</li><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-media-hail-the-effectiveness-of-traditional-chinese-medicine-tcm-in-treating-covid-20221209/“ target=“_blank“>China media hail the effectiveness of Traditional Chinese medicine, TCM, 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Urals crude at Baltics ports this week assessed at $45/bbl.</a>r</li></ul><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/australian-pm-announces-government-will-set-a-price-cap-for-gas-aud12-and-coal-aud125-20221209/“ target=“_blank“>Australian PM announces government will set a price cap for gas (AUD12) and coal (AUD125)</a>r</li><li><a target=“_blank“ href=“https://www.forexlive.com/news/forexlive-asia-pacific-fx-news-wrap-usd-lower-as-the-week-works-toward-the-close-20221209/“ target=“_blank“>ForexLive Asia-Pacific FX news wrap: USD lower as the week works toward the close</a>d</li><li><a target=“_blank“ href=“https://www.forexlive.com/news/oecd-head-cormann-says-the-global-economic-outlook-is-continuing-to-deteriorate-20221209/“ target=“_blank“>OECD head Cormann says the global economic outlook is continuing to deteriorate</a>re</li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/economic-calendar-in-europeuk-friday-9-december-2022-boe-inflation-attitudes-survey-20221209/“ target=“_blank“>Economic calendar in Europe/UK – Friday, 9 December 2022 – BoE inflation attitudes survey</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/trade-ideas-thread-friday-9-december-2022-ukeurope-version-20221209/“ target=“_blank“>Trade ideas thread – Friday, 9 December 2022, UK/Europe version!!!</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/Cryptocurrency/australian-crypto-exchange-digital-surge-entered-voluntary-administration-20221209/“ target=“_blank“>Australian crypto exchange Digital Surge entered voluntary administration</a></li></ul><p class=“western“>
It
was a relatively sedate session, traders are looking ahead to a busy
central bank driven week coming up next week with the Fed, Bank of
England and European Central Bank. Even today there was a focus
on US data with November PPI and December Michigan Sentiment ahead in
the coming hours.
</p><p class=“western“>The
USD firmed a little after losing some ground in Asia. Ranges were not
large.
</p><p class=“western“>Oil
popped a little (and, as I update, has not followed through) with
news that China is to sell 750bn yuan of bonds to fund an economic
boost. China news has been optimistic all week as reopening moves are
made and further support is provided to the troubled property sector.</p><p class=“western“>CAD was weak:</p>

This article was written by Eamonn Sheridan at www.forexlive.com.

<p>
EUR/USD
</p><ul><li>1.0400 406mn
</li><li>1.0440-50 333mn
</li><li>1.0550 427mn</li></ul><p>USD/JPY </p><ul><li>135.00 511mn
</li><li>135.25 305mn
</li><li>135.50 210mn</li><li>136.00 623mn
</li><li>137.00 200mn</li></ul><p>GBP/USD
</p><ul><li>1.2200 211mn
</li><li>1.2400 291mn</li></ul><p>EUR/GBP
</p><ul><li>0.8700 280mn</li></ul><p>AUD/USD
</p><ul><li>0.6600 482mn
</li><li>0.6700 343mn
</li><li>0.6750 219mn</li><li>0.6800 428mn</li></ul><p>USD/CAD
</p><ul><li>1.3500 1.08bn
</li><li>1.3550-60 473mn
</li><li>1.3600 395mn</li><li>1.3650 625mn
</li><li>1.3700 478mn</li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.