2022-12-05 09:55:00


Think back to this time last year. Inflation was still “transitory”, S&P 500 began its run to 4,800 - Ethereum approached $5,000, and 1-year U.S. Treasury traded at a 0.11% yield. The risk of consensus never getting it right might again be proved in 2023 .

The inversion  suggest a recession and consensus calls for it -  most anticipated recession of the century - but how deep and how long are the two questions everybody is trying to figure out.
Will Fed  relinquish remaining credibility by pivoting in the face of 6.6% core inflation ?

When faced with a myriad of uncertainties the most sensible path is often to sit back and see how events unfold. That is what OPEC+ has chosen to do with the crude oil market.

Dec. 5 ISM non-mfg, Dec. 13 CPI and Dec. 14 Fed key for USD`s retreat.Fed funds still pricing in a 4.93% May peak and 4.48% by end 2023.Fed speakers only signaling slower rate hikes, not a lower ceiling. But Dollar getting whacked reflecting the seasonal weakness - not to be read as precursor to what`s around the corner .

EUR/USD climbed to 1.0575 - where it sits now.Resistance @ Jun 27 high @ 1.0615 & break targets 61.8 of 2022 drop @ 1.0743

China services activity shrinks to 6-month lows, taken in stride.Drop in overall Covid cases &  no sign of any significant weekend unrest -- entrenched China reopening optimism.Politburo meeting early Dec awaited.Daily close below 100-dma at 7.0220 will strengthen bearish outlook.

UK economy to shrink in 2023, risks `lost decade`: CBI .Dour outlook reflects OECD forecasts, but at present sterling is Dollar led.Fri`s low attracted strong buying by the just-cleared 200 dma @1.2151.GBP/USD to 1.2345, highest since June 17.Sustained 1.2300 break targets a test of 1.2441, 61.8% 2022 fall.

Rationally speaking , USD/JPY could be close to a near-term  base - 38.2% of  102.59-151.94 Jan 21-Oct 22 rally is at 133.08 - failed to sustain rally to 135.98 from 133.62 low.Fri`s high capped at 38.2% of Wed-Fri Powell-led drop. Range till FOMC 133.08 135.98

Consensus sees no risk from the State election outcome. Probable China reopen could underpin the trade deficit- though positive for global risk undertone ,it`s deemed rupee negative .Close above 81.50 risks sqeeze towards 81.80, 82.0