2022-11-30 08:30:00


Markets remain fixated on anything that involves inflation and most of the China  headlines are leading many to believe the Fed hawks might indeed be proven right.

Busy corporate issuance -- including a big Amazon deal -- fueled the  rise in Treasury yields, offsetting downward pull of weaker German CPI&  softer U.S. house prices & consumer confidence. 2-10 year-Treasury curve inversion narrowed to -74bp from last week`s multi-decade 77.7bp low.

Rising rates & Persistent inflation continued to weigh on confidence  but the labour market prospects were a shade less dreary. Today : ADP, Jolts,  pending homes pre beige book and Powell- obviously  Friday payroll &  Dec. 13 CPI are key for Dec. 14 FOMC.

Oil’s rally ran out of steam after reports that OPEC+ might end up keeping their output steady. ​JPM :"Despite more pessimistic balances over the next few months,  Brent might  average $90/bbl in 2023 and $98/bbl in 2024,"

Price action at around 10 dma  at 1.0345
Support is at the 21-day MA at 1.0224 and break increases downward momentum

China`s air traffic has sunk down to 35% of what it was in 2019.Official Nov mfg PMI 48.0, Services 46.7 - deep contraction - however Yuan recovery continues- ignores China stocks- .buoyed by news China to ramp up vaccinations for elderly.Choppy trading in a wide 7.0500-7.2500 range

GBP consolidating its 17.7% recovery from September`s mini-budget record low to last week`s 1.2153 peak just below 200-dma.
Winter sets in and domestic fundamentals weigh.UK fresh food prices climb record 14.3% in November – BRC . Cost of living crisis suggests nurses strike the first of many.Bailey said that conditions in the gilt market had not yet returned to normal.
Under pressure 1.1955 ( 10dma) is  major support- Sustained break would test 1.1762( 21 dma)

October prelim IP -2.6% m/m (exp -1.5%).
USDJPY broadly mirrors moves in US yields, currently up- still at recent core 137-142 range.

Markets exuberant about Q2 GDP today - economy likely slowed to annual 6 % in Jul-Sept. However it`s the  Trade deficit that  matters for Rupee . Cash appears  to have been a  month end aberration for now  but the risk is embedded. Monthly close above 81.67 to reinvigorate upside momentum .