Daily Market Outlook, January 17, 2024

Daily Market Outlook, January 17, 2024Munnelly’s Market Minute…“UK Inflation Uptick Sees Sterling Higher”Asian stocks were under pressure due to the recent rise in yields and reduced expectations of Fed rate cuts. The Nikkei 225 initially rose due to a weaker currency but later dropped from three-decade highs as it succumbed to the risk-off sentiment. The Hang Seng and Shanghai Comp also retreated due to mixed Chinese economic data, with Hong Kong particularly underperforming due to losses in tech and property sectors.December UK CPI inflation slightly exceeded expectations, with the annual rate rising to 4.0% from November's 3.9%. This marks its first monthly increase since February. Despite this, it's crucial to note that, due to sharp declines in the previous two months, the rate still saw a significant drop in Q4 from 6.7% in September. The core rate held steady at 5.1%, while services inflation increased to 6.4% from 6.3%. Inflation might see a modest uptick in January due to the latest Ofgem price cap implementation, but markets anticipate a continued decline thereafter, potentially reaching the 2.0% target before mid-year. The Office for National Statistics will release the November UK house price index today, following a 1.2% decline in October. While some indices suggest a rebound in prices, the official numbers will be scrutinized for signs of this trend. Today's December Eurozone CPI data, a second reading, is not expected to be revised. The initial report indicated a slight increase in headline inflation but a further decline in the core rate. Several ECB representatives will be speaking at Davos today, including ECB President Lagarde, ECB's Cipollone on "Euro Cyber Resilience", and ECB's Knot.Stateside, a busy day for data includes retail sales and industrial production reports for December. A 0.4% rise is forecasted for retail sales during the festive month, while industrial production is expected to see a more modest 0.2% increase. Both releases will offer insights into Q4 GDP growth, expected next week. While it's anticipated that Q4 growth will slow after the robust 4.9% annualized expansion in Q3, early indications suggest solid growth. Additionally, the Fed Beige Book, featuring anecdotal economic reports, will be released today, with the previous one highlighting increased downside growth risks. Fed's Vice Chair of Supervision Barr will speak on cyber risks, Fed's Bowman on bank capital reforms, and Fed's Williams on "an Economy that Works for All: Measurement Matters".Overnight Newswire Updates of NoteUS Spending Bill To Avert Shutdown Clears First Senate HurdleUS Set To Designate Iran-Backed Houthi Rebels As Terror GroupBond Traders Start To Hedge Against Half-Point Fed Cut In MarchChina’s Economic Growth Disappoints, Fuelling Calls For StimulusChinese Price Gauge Shows Longest Deflation Streak Since 1999Polled Economists All Expect BoJ Holding In January After QuakesJapan Manufacturers Pessimistic As Dark Clouds Hang Over ChinaTory Resignations, Rebellions Expose Sunak’s Weak Grip On PartyUK Saw Strong Wage Growth In Late 2023, Jobs Site Indeed SaysEU Moves Ahead With Plans For New Naval Operation In Red SeaRussia Call Peace Meetings Pointless, Says Plan Cannot SucceedGlobal LNG Fleet Avoiding The Red Sea As More Tankers Diverted(Sourced from Bloomberg, Reuters and other reliable financial news outlets)FX Options Expiries For 10am New York Cut (1BLN+ represent larger expiries, more magnetic when trading within daily ATR)EUR/USD: 1.0850 (1.1B), 1.0890-1.0900 (1.3B), 1.0970-75 (1.5B)EUR/USD: 1.1000 (500M), 1.1015-25 (695M), 1.1050 (700M), 1.1060-65 (825M)EUR/USD: 1.1070-75 (2.0B). USD/JPY: 144.00 (890M), 145.00 (370M)USD/JPY: 145.75 (1.2B), 147.00 (425M), 147.35 (1.2B)GBP/USD: 1.2600 (400M), 1.2625 (335M), 1.2700 (685M), 1.2715-25 (435M)GBP/USD: 1.2795 (500M), 1.2885-1.2900 (540M), 1.2965 (730M)AUD/USD: 0.6735 (355M), 0.6750 (940M). NZD/USD: 0.6330-50 (690M)USD/CAD: 1.3235-40 (2.3B), 1.3375-80 (1.3B)CFTC Data As Of 12/01/24USD bearish increasing 12,192 CAD bearish decreasing -551 EUR bullish neutral 16,243 GBP bullish increasing 1,647 AUD bearish decreasing -2,158 NZD neutral neutral -110 MXN bullish neutral 2,606 CHF bearish neutral -644 JPY bearish neutral -4,841Technical & Trade ViewsSP500 Bullish Above Bearish Below 4750Daily VWAP bullishWeekly VWAP bullishBelow 4730 opens 4700Primary support 4670Primary objective is 4830EURUSD Bullish Above Bearish Below 1.0930 – 1.0850 Target Hit –  New PatternDaily VWAP bearishWeekly VWAP bullishAbove 1.10950 opens 1.10Primary resistance 1.10Primary objective is 1.0730GBPUSD Bullish Above Bearish Below 1.2750Daily VWAP bearishWeekly VWAP bullishAbove 1.28 opens 1.2870Primary resistance  is 1.2820Primary objective 1.2580USDJPY Bullish Above Bearish Below 146.40 – 147 target Hit – New PatternDaily VWAP bullishWeekly VWAP bullishBelow 146 opens 145.50Primary support 143.50Primary objective is 149AUDUSD Bullish Above Bearish Below .6650Daily VWAP bearishWeekly VWAP bearishAbove .6680 opens .6550Primary support .6525Primary objective is .6933BTCUSD Bullish Above Bearish below 45200Daily VWAP bearishWeekly VWAP bullishBelow 45000 opens 44600Primary support  is 40000Primary objective is 50000