DAILY MACRO

Markets stay hesitant to buy up risk assets on this World Cup-filled and shortened US holiday trading week.Friday isn`t officially a holiday but as is typical with this holiday season, the break tends to extend through to the weekend more or less.Hence narratives don`t change : Apprehension of a recession with persistent inflation .

G7 plans to announce tomorrow at what level  price ceiling for Russian oil will be set.  Russia may cut oil output due to price cap -deputy PM .Hence it remains unclear as to how this price cap would impact the market.  Add to it the OPEC runours and denials Panic selling followed by equally   panic buying -

Fed`s Daly -seen as the voice of Powell - said that the impact of current Fed hikes bigger than expected -not ready to say what hike Fed should do at Dec Meeting-Labour market very strong while inflation is unacceptably high- tad hawkish ?

If China reconnects with the world next year, the investor thesis went : its economy will recover from its sharpest slowdown in decades, and with it, the prospects of a global recession in 2023 might fade as well.But that exuberance contrasts with the bleak economic reality inside China.

Attention on FOMC minutes tomorrow.US economy could have to deal with  massive rail worker strike before the holidays.
USD index : Close above 107.36 flags caution to bears.Close above 108.92, 38.2% of the Sept-Nov fall would end downside bias.

German PPI posted its first monthly fall in two and a half years.The underlying inflation pressure, using whichever metric you want to look at, does not show signs of stabilisation - so there is really nothing for the doves.2-year bund-Treasury yield spreads fell to -2.47% versus November`s -2.22% closing high.Resistance 10 dma @ 1.0283.Support at 38.2 of  0.9730/1.0481 move at 1.0194.

Focus still on China`s response to spike in Covid .China tells banks to step up credit support for economy -China to provide $27.9 bln for house completions.Bulls will next aim to clear 21 dma at 7.2123.That will enable next wave higher till around 7.30000

Sunak will not pursue trade ties that rely on EU alignment - Sovereignty`, not trade and the economy remains key for current govt.Economy and cost of living crisis suggests a long cold winter in UK. To stay ranged between 1.1783 10 dma & 1.2038, 50% 2022 fall  

Suzuki urges swift adoption of more spending measures .The dollar looks ripe for a much bigger rebound.38.2% of the 149.70/137.665 dive at 142.23/26.Close above those hurdles is key to trying 50% & 61.8% at 143.68/5.10.

Thankfully there has been hands off approach since last few days and so it is construed that this trading zone does not  create any flutters in Mint street.Recent rallies toward the psychological 82.00 area have been stalling.Supports at 81.60 5dma & resistance 81.86 50% fibo- close above that fibo will see increased momentum .