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Daily Market Outlook, December 1, 2022
‘Powell Points To Moderating The Pace Of Rate Rises, Santa Rally To Start?’
Asian equity markets took their lead from the late surge on Wall Street, Fed Chair Powell delivered a speech on the economy, inflation and employment, during which he suggested it made sense to consider slowing the pace of rate hikes in the US, and highlighting that he didn't want to fall foul of over tightening, risk appetite abounded on the back of these comment, the SP500 over 150 points, the Dollar and US treasury yields sagged. Overnight, reports suggested that China may be softening its stance on Covid restrictions, data out of China also showed glimmers of hope with an improvement in Caxian manufacturing, up from 49.2 to 49.4. This morning’s UK Nationwide house price index fell for the second month in a row as buyers remain sidelined due to the negative impact of rate rises. In Germany retail sales data showed a sharper than expected fall ahead of the all important holiday shopping season.
On the data front for the day ahead, the focus in the UK and Eurozone will be on PMI manufacturing data, flash reading have indicated that both regions are likely to remain in contractionary territory, completing and fifth month of depressed readings, this data will likely also confirm fears of negative Q4 GDP prints for both economies, however, on the positive side of the ledger their are nascent signs of the potential for peak inflationary pressures. In the US markets are poised for PCE deflator data which is expected to confirm the signal from October CPI, that inflation has started to slow. US ISM manufacturing data is expected to show activity continuing to slow, but markets expect it to hold the critical 50 level, representing contraction below, expansion above. The next major focus for markets will be tomorrow’s all important non Farm Payrolls data, any signs of deterioration in the employment landscape will likely be taken positively by markets based on the ‘bad news, good news’ dichotomy, with markets seeing weak data as supporting the potential for a Fed pivot on rate rises.
Overnight Headlines
Fed's Powell Signals Fed Prepared To Slow Rate-Rise Pace In December
Fed's Cook Says Smaller Rate Moves May Be Prudent Given Lags
US Economic Growth Slowed This Fall, Fed’s Beige Book Says
US House Votes To Block Rail Strike, Mandate Paid Sick Leave
Beijing City To Let Some Low-Risk Covid Patients Home Isolate
Beijing Sees Record 5,006 New Infections As Outbreak Persists
China's Factory Activity Shrinks In Nov Amid Widespread Covid Curbs
Japan Firms Rising Capex Fuels Hopes For Smaller GDP Contraction In Q3
Japan's Factory Activity Shrinks For First Time Nearly 2 Years
BoJ Policymaker Vows To Keep Ultra-Low Rates Until Wages Perk Up
Dollar Sinks To 3-Month Low Vs Yen As Powell Says Fed To Go Slow
Oil Dips On OPEC+ Uncertainty; Easing China Covid Curbs Cap Declines
US Stocks Record First Back-To-Back Monthly Gains Since 2021
Chinese Stocks Add To Historic Rally As Reopening Signs Grow
Tesla Is Planning A Massive Output Out Of Giga Texas In Q1 2023
Musk Says Apple Isn’t Removing Twitter App, Easing Standoff
TSMC Plans To Make More Advanced Chips In US At Urging Of Apple
Technical & Trade Views
SP500 Bias: Bullish Above Bearish Below 4050
Technicals
Primary support is 4050
Primary upside objective is 4120
Next pattern confirmation, acceptance above 4050
Failure below 3930 opens a test of 3900
20 Day VWAP bullish, 5 Day VWAP bullish
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EURUSD Bias: Bullish Above Bearish below 1.0340
Technicals
Primary support is 1.0340
Primary upside objective is 1.0620
Next pattern confirmation, acceptance above 1.0485
Failure below 1.03 opens a test of 1.0220
20 Day VWAP bullish, 5 Day VWAP bullish
Today’s New York Cut Option Expiries: EUR/USD: 1.0300-10 (1.58BLN), 1.0350 (393M), 1.0385 (256M), 1.0400 (275M), 1.0450 (212M), 1.0500-05 (556M) (477M), 1.0525 (246M), 1.0550 (261M), 1.0600 (1.2BLN)
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GBPUSD Bias: Bullish Above Bearish below 1.1950
Technicals
Primary support is 1.1950
Primary upside objective 1.22
Next pattern confirmation, acceptance above 1.21
Failure below 1.19 opens a test of 1.1770
20 Day VWAP bullish, 5 Day VWAP bullish
Today’s New York Cut Option Expiries: 1.1890 (309M), 1.1990-00 (359M)
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USDJPY Bias: Bullish above Bearish Below 140
1.36 Target Achieved, New Pattern Emerging
Technicals
Primary resistance is 140
Primary downside objective is 135
Next pattern confirmation, acceptance below 136
Acceptance above 140 opens a test of 142
20 Day VWAP bearish, 5 Day VWAP bearish
Today's New York Cut Option Expiries: 137.00 (215M), 137.50 (250M), 137.90 (290M)
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AUDUSD Bias: Bullish Above Bearish below .6650
Technicals
Primary support is .6650
Primary upside objective is .6900
Next pattern confirmation, acceptance above .6775
Failure below .6660 opens a test of .6600
20 Day VWAP bullish, 5 Day VWAP bullish
Today’s New York Cut Option Expiries: 0.6800 (300M)
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BTCUSD Bias: Intraday Bullish Above Bearish below 16500
17100 Target Achieved, New Pattern Emerging
Technicals
Intraday 16500 is primary support
Primary upside objective is 18000
Next pattern confirmation, acceptance below 17200
Failure 16400 opens a test of 16000
20 Day VWAP bearish, 5 Day VWAP bullish
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!