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Daily Market Outlook, December 9, 2022 Wall Street Rebounds Ahead of US Producer Prices DataWall Street broke a week-long losing streak at the close of New York trading, and Asian equity markets followed suit erasing losses on the week, while investor sentiment remains somewhat shaky, markets have been buoyed by a belief that inflationary pressures are finally starting to ease, Chinese data overnight showed consumer inflation falling from 2.1% to 1.6%. The Nikkei was a standout performer as the Prime Minister denied reports of an increase in income tax, and investors took further solace from reports out of China that authorities are mulling additional easing of restrictive property market policies, with official announcements due next week.For the trading day ahead, investors will be focused on headline data out of the US in the form of producer price inflation and the University of Michigan consumer sentiment report. Producer price data will be parsed for further signs of moderation in inflation ahead of next week's all-important CPI release, Fed officials will be hoping to see signs that services price inflation is declining, as this is a key input to the overall inflation calculation as Fed officials look to the rate path for 2023. Markets have penciled in a PPI to print a 7.2% versus the prior 8%, while the core metric ex-energy and food is expected to decline from the prior 6.7% to a number sub 6%. With respect to the University of Michigan sentiment survey, market watchers are looking for a number broadly in line with last month's 56.8, confirming that the US consumer remains cautious given the restrictive rate environment and ongoing inflation concerns, additionally, consumer inflation expectations will be monitored given the rise seen over the past two months.Markets-wise the rebound in investor risk sentiment into the weekend has seen US Treasury yields take a breather, declining sub 3.5% overnight, weighing on the greenback and supporting equities, European bourses have opened broadly higher, however, investors are likely to remain pensive ahead of next week's heavy data slate, which includes US headline inflation and central bank meetings for the US, UK, and the Eurozone.Overnight HeadlinesChina’s Factory-Gate Prices Remain In Deflation In NovemberChina's Li Says Growth To Rebound On Covid Policy ChangeChina Must Boost Consumption In 2023 To Help Economy – MediaU.S. To Levy Human-Rights Sanctions On Russia, China – WSJUS Dollar Slips On Recession Fears, Central Bank Meetings LoomChina Bond Traders Cut Leverage As Covid Shift Dampens Haven BidOil Set For Steep Weekly Loss As Slowdown Concerns Loom LargeRBC: Oil Selloff Due To Paper Markets Selling Into Low LiquidityAsia Stocks Head For Sixth Week Of Gains On China OptimismBroadcom Forecast Signals That Corporate Tech Spending Is StrongCostco Stock Falls As Retailer's Earnings Disappoint, Online Sales FallFX Options Expiring 10am New York CutEUR/USD: 1.0290-00 (1.4BLN), 1.0330 (203M), 1.0370 (203M)1.0400 (406M), 1.0440-50 (333M), 1.0550 (427M)USD/JPY: 135.00 (511M), 135.25 (305M), 135.50 (210M)136.00 (623M), 137.00 (200M), 138.00 (395M)GBP/USD: 1.2200 (211M), 1.2400 (291M)EUR/GBP: 0.8700 (280M)AUD/USD: 0.6600 (482M), 0.6700 (343M), 0.6750 (219M)0.6800 (428M)USD/CAD: 1.3500 (1.08BLN), 1.3550-60 (473M), 1.3600 (395M)1.3650 (625M), 1.3700 (478M), 1.3800 (690M)Technical & Trade ViewsSP500 Bias: Bullish Above Bearish Below 3900Primary support is 3900Primary upside objective is 4120Failure at 3880 opens a test of 385020 Day VWAP bullish, 5 Day VWAP bearishEURUSD Bias: Bullish Above Bearish below 1.0450Primary support is 1.0450Primary upside objective is 1.0620Failure at 1.04 opens a test of 1.035020 Day VWAP bullish, 5 Day VWAP bearishGBPUSD Bias: Bullish Above Bearish below 1.21Primary support is 1.21Primary upside objective 1.24Failure at 1.2080 opens a test of 1.203020 Day VWAP bullish, 5 Day VWAP bullishUSDJPY Bias: Bullish above Bearish Below 137.70Primary resistance is 137.70Primary downside objective is 132Acceptance above 138 opens a test of 139.3020 Day VWAP bearish, 5 Day VWAP bullishAUDUSD Bias: Bullish Above Bearish below .6640Primary support is .6640Primary upside objective is .6900Failure at .6600 opens a test of .655020 Day VWAP bullish, 5 Day VWAP bearishBTCUSD Bias: Intraday Bullish Above Bearish below 16500Intraday 16500 is primary supportPrimary upside objective is 18000Failure at 16400 opens a test of 1600020 Day VWAP bearish, 5 Day VWAP bullish
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Daily Market Outlook, December 9, 2022
