Daily Market Outlook, January 19, 2024

Daily Market Outlook, January 19, 2024Munnelly’s Market Minute…“China Short Sales Ban Adds To Regional Concerns”Asian stocks mainly gained momentum from the tech-driven advances on Wall Street, where sentiment was boosted by the lowest initial jobless claims since September 2022. Tech stocks were also lifted by TSMC's earnings, which drove the company's shares up by over 6% and supported other chipmakers like Samsung Electronics. The Nikkei 225 was supported and briefly surpassed 36K handle after Japanese CPI data continued to soften, and a source report indicated no pressure for the BoJ to rush towards the exit. On the other hand, the Hang Seng and Shanghai Comp were subdued due to concerns about the uneven recovery in the Chinese economy, and a restriction on short sales by China's largest brokerage failed to stimulate a recovery. Earlier today, the UK's Office for National Statistics released data indicating a significant 3.2% month-on-month decline in retail sales volume for December. This marks the largest drop since January 2021 during the pandemic, following a 1.4% increase in November. The result fell below the consensus forecast of a 0.5% decrease. Both food and non-food store sales experienced declines of 3.1% and 3.9%, respectively, while non-store (primarily online) sales fell by 2.1%. The ONS attributed part of this weak performance to consumers advancing purchases to take advantage of November's Black Friday sales, with post-Christmas sales being subdued. For Q4 overall, retail sales fell by a less severe 0.9% quarter-on-quarter. Other major releases are absent in the UK for today, with market attention turning to next week's data, including flash PMI and GfK consumer confidence.In the Eurozone, the spotlight is shifting to the ECB policy update scheduled for next Thursday, accompanied by Eurozone flash PMI and German IFO business surveys. Expectations lean toward no change in Eurozone interest rates for a third consecutive policy meeting. However, President Lagarde's comments on the interest rate outlook will be closely scrutinized, and recent remarks from her and Chief Economist Lane suggest the ECB might delay rate cuts until the summer. Lagarde is participating in a discussion on the global economic outlook today at the World Economic Forum in Davos, which appears to be the last ECB appearance before next week's policy update.Sateside, key releases include the University of Michigan's consumer sentiment survey and existing home sales. Despite a robust improvement last month attributed to a better inflation outlook, headline consumer sentiment remains historically weak. The survey's inflation expectations metrics will be closely monitored alongside the headline index, with expectations of a partial correction to consumer sentiment this month.Overnight Newswire Updates of NoteUS Prepares Rule Forcing Banks To Tap Fed Discount WindowCongress Agrees Funding To Avert US Government ShutdownUS Press Ahead With Least Bad Option In Confronting HouthisHouthis Fire Missiles At Another US-Owned Vessel In Red SeaChina’s Biggest Brokerage Limits Short Sales After Stock RoutJapan’s Inflation Cools For Second Month Ahead Of BoJ MeetChancellor Hunt Gives Strongest Hint Will Cut Taxes In BudgetGerman Budget Officials Approve New Borrowing Of EUR39BlnBitcoin Retreats To One-Month Low, ETF-Led Enthusiasm FadesEU Commission Set To Block Amazon iRobot $1.7Bln Acquisition(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: 1.0800 (2.5BLN), 1.0850 (1.1BLN), 1.0880-90 (700M)1.0920 (408M), 1.0950 (452M)USD/CHF: 0.8700 (346M)45 (306M)GBP/USD: 1.2600 (226M), 1.2650 (1.4BLN). EUR/GBP: 0.8575-85 (350M)AUD/USD: 0.6600 (834M), 0.6650 (585M). AUD/NZD: 1.0850 (701M)USD/CAD: 1.3335 (1.9BLN), 1.3430-40 (639M), 1.3470 (294M)USD/JPY: 147.00 (605M), 147.45 (563M), 147.90-148.00 (1.5BLN), 149.00 (390M)EUR/NOK: 11.40 (329M), 11.5700 (871M)The potential for BOJ FX intervention has significantly increased. The trade-weighted yen reached a historic low at the end of December, and there has been a substantial decline in its value in January. USD/JPY has surged by over 800 points, approaching the high of 2023 by less than 400 points. The yen has experienced a sharp drop against GBP, EUR, and AUD. It has also weakened against the historically weak TRY and the very weak INR. The depreciation of the yen effectively acts as a form of monetary policy easing, which supports inflation. Selling JPY is seen as the most effective way to finance carry trades.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 4700 opens 4675Primary support 4670Primary objective is 4830EURUSD Bullish Above Bearish Below 1.0930 Daily VWAP bearishWeekly VWAP bearishAbove 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 1.2785Primary objective 1.2570USDJPY Bullish Above Bearish Below 146.40 Daily 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 44000Daily VWAP bearishWeekly VWAP bullishBelow 40000 opens 39000Primary support  is 40000Primary objective is 50000