South Korea's won got hammered amid poor data

Market Brief

Here we are, on Thursday the ECB is expected to take action by increasing its support to the economy. Mario Draghi has plenty of tool to do it but we anticipate that the ECB will cut in the deposit rate as well as an increase of the size of the bond purchase programme and an extension of the QE. The decision is due on Wednesday. Meanwhile, we believe that the increase/extension of the stimulus has already be priced in, both in the equity and FX markets, which means that if Draghi does not deliver it will most likely cause a sell-off in equities and an adjustment of the EUR complex. EUR/USD continues to move lower even though the negative momentum is losing steam ahead of the decision. The key level at 1.0458 (March 16th low) will continue support the pair while on the upside the strongest resistance area lies at around 1.11. The single currency is currently treading water between 1.0570 and 1.06.

In Australia, inflation data released earlier this morning showed that prices level remained stable in October as the economy adjusts to the low commodity prices environment. TD securities inflation printed flat 1.8%y/y in November while on a month-over-month basis the gauge rose 0.1% compared to a flat reading in October. Separately company operating profit climbed 1.3%q/q in the September quarter, beating market expectations of 1% and upwardly revised contraction of -0.5% in the previous quarter. As a result the Aussie got a little boost following the release of the data with AUD/USD rising above the 0.72 threshold. With the RBA willing to stay on the sidelines for now and with the Aussie economy stabilising, we believe that there is room for further AUD appreciation, especially given the fact that the upcoming lift-off by the Federal Reserves is almost completely priced in.

In South Korea, both the equity market and the won got hammered amid disappointing data from the industrial sector. Industrial output contracted 1.4%m/m (s.a.), well below median forecast of -0.9% and previous month’s upward revision of 2.2%. On a year-over-year basis, industrial production expanded 1.5% versus 2.2% consensus. Consequently the Kospi was sold-off in the Asian session and dropped 1.82% while the local currency retreated -0.45% against the greenback.

NZD/USD is among the biggest winner for now as the Kiwi surged 0.35% against the US dollar on better-than-expected as business confidence climbed to 14.6 versus 10.5 in the previous, the highest reading since May this year, as companies regain confidence and start looking positively toward the future. NZD/USD rose as much as 0.75% in the Asian session and is back above 0.6550, confirming the trend reversal initiated a couple of weeks ago. A first resistance can be found at 0.6567 (Fib. 50% on September-October rally) while on the downside a support can be found at 0.6430 (low from November 18th).

Today traders will be watching GDP from Sweden; mortgage approval from the UK; inflation data from Italy; trade balance from South Africa; budget balance from Brazil; CPI from Germany; Chicago purchasing manager index, pending home sales and Dallas Fed manufacturing activity index from the US.

Global Indexes	Current Level	% Change
Nikkei 225 Index	19747.47	-0.69
Hang Seng Index	22010.32	-0.26
Shanghai Index	3445.405	0.26
FTSE futures	6356.5	-0.37
DAX futures	11286.5	-0.07
SMI Futures	8976	-0.32
S&P future	2085.6	-0.21

Global Indexes	Current Level	% Change
Gold	1057.72	0.03
Silver	14.1	-0.01
VIX	15.12	-0.46
Crude wti	41.63	-0.19
USD Index	100.11	0.09

Today's Calendar	Estimates	Previous	Country/GMT
GE Oct Retail Sales MoM	0,40%	0,00%	EUR/07:00
GE Oct Retail Sales YoY	2,90%	3,40%	EUR/07:00
DE Oct Unemployment Rate SA	3,90%	3,90%	DKK/08:00
DE Oct Unemployment Rate Gross Rate	4,60%	4,60%	DKK/08:00
DE 3Q P GDP SA QoQ	0,00%	0,20%	DKK/08:00
SP Oct Retail Sales YoY	-	4,40%	EUR/08:00
SP Oct Retail Sales SA YoY	4,30%	4,30%	EUR/08:00
SZ Nov KOF Leading Indicator	100,2	99,8	CHF/08:00
TU Oct Trade Balance	-3.95b	-3.74b	TRY/08:00
DE 3Q P GDP SA YoY	1,10%	1,80%	DKK/08:00
SZ nov..27 Total Sight Deposits	-	468.3b	CHF/08:00
SZ nov..27 Domestic Sight Deposits	-	402.7b	CHF/08:00
GE Nov CPI Saxony MoM	-	0,00%	EUR/08:00
GE Nov CPI Saxony YoY	-	0,20%	EUR/08:00
SW Sep Wages Non-Manual Workers YoY	-	2,40%	SEK/08:30
SW 3Q GDP QoQ	0,40%	1,10%	SEK/08:30
SW 3Q GDP WDA YoY	3,40%	3,30%	SEK/08:30
NO Oct Credit Indicator Growth YoY	5,60%	5,60%	NOK/09:00
NO Dec Norges Bank Daily FX Purchases	-	-700m	NOK/09:00
GE Nov CPI Brandenburg MoM	-	-0,10%	EUR/09:00
GE Nov CPI Brandenburg YoY	-	-0,10%	EUR/09:00
GE Nov CPI Hesse MoM	-	0,00%	EUR/09:00
GE Nov CPI Hesse YoY	-	0,20%	EUR/09:00
GE Nov CPI Bavaria MoM	-	0,20%	EUR/09:00
GE Nov CPI Bavaria YoY	-	0,50%	EUR/09:00
SP Sep Current Account Balance	-	1.7b	EUR/09:00
UK Oct Net Consumer Credit	1.3b	1.3b	GBP/09:30
UK Oct Net Lending Sec. on Dwellings	3.4b	3.6b	GBP/09:30
UK Oct Mortgage Approvals	69.9k	68.9k	GBP/09:30
UK Oct Money Supply M4 MoM	-	-1,00%	GBP/09:30
UK Oct M4 Money Supply YoY	-	-0,60%	GBP/09:30
UK Oct M4 Ex IOFCs 3M Annualised	3,00%	4,00%	GBP/09:30
GE Nov CPI North Rhine Westphalia MoM	-	0,00%	EUR/09:30
GE Nov CPI North Rhine Westphalia YoY	-	0,20%	EUR/09:30
UK Nov Lloyds Business Barometer	-	50	GBP/09:30
IT Nov P CPI NIC incl. tobacco MoM	-0,10%	0,20%	EUR/10:00
IT Nov P CPI NIC incl. tobacco YoY	0,40%	0,30%	EUR/10:00
IT Nov P CPI EU Harmonized MoM	-0,20%	0,50%	EUR/10:00
IT Nov P CPI EU Harmonized YoY	0,40%	0,30%	EUR/10:00
BZ Central Bank Weekly Economists Survey	-	-	BRL/10:25
IN Oct Fiscal Deficit INR Crore	-	9268	INR/10:30
IT Oct PPI MoM	-	-0,20%	EUR/11:00
IT Oct PPI YoY	-	-3,80%	EUR/11:00
SA Oct Trade Balance Rand	-7.8b	-0.9b	ZAR/12:00
IN 3Q GVA YoY	7,40%	7,10%	INR/12:00
IN 3Q GDP YoY	7,30%	7,00%	INR/12:00
SA Oct South Africa Budget	-22.30b	-5.55b	ZAR/12:00
BZ Oct Primary Budget Balance	-12.9b	-7.3b	BRL/12:30
BZ Oct Nominal Budget Balance	-34.1b	-77.3b	BRL/12:30
BZ Oct Net Debt % GDP	34,00%	33,20%	BRL/12:30
GE Nov P CPI MoM	0,10%	0,00%	EUR/13:00
GE Nov P CPI YoY	0,40%	0,30%	EUR/13:00
GE Nov P CPI EU Harmonized MoM	0,10%	0,00%	EUR/13:00
GE Nov P CPI EU Harmonized YoY	0,30%	0,20%	EUR/13:00
CA 3Q Current Account Balance	-$15.15b	-$17.40b	CAD/13:30
US Nov ISM Milwaukee	48	46,66	USD/14:00
US Nov Chicago Purchasing Manager	54	56,2	USD/14:45
EC ECB Publishes Weekly QE Data	-	-	EUR/14:45
CA nov..27 Bloomberg Nanos Confidence	-	57,7	CAD/15:00
US Oct Pending Home Sales MoM	1,00%	-2,30%	USD/15:00
US Oct Pending Home Sales NSA YoY	4,50%	2,50%	USD/15:00
US Nov Dallas Fed Manf. Activity	-10	-12,7	USD/15:30
BZ nov..29 Trade Balance Weekly	-	-$396m	BRL/17:00
NZ 3Q Terms of Trade Index QoQ	-2,60%	1,30%	NZD/21:45
AU nov..29 ANZ Roy Morgan Weekly Consumer Confidence Index	-	114,5	AUD/22:30
AU Nov AiG Perf of Mfg Index	-	50,2	AUD/22:30
IN Oct Eight Infrastructure Industries	-	3,20%	INR/23:00

Currency Tech

EURUSD
R 2: 1.1387
R 1: 1.1095
CURRENT: 1.0590
S 1: 1.0458
S 2: 1.0000

GBPUSD
R 2: 1.5659
R 1: 1.5529
CURRENT: 1.5033
S 1: 1.4857
S 2: 1.4566

USDJPY
R 2: 135.15
R 1: 125.86
CURRENT: 122.83
S 1: 120.07
S 2: 118.07

USDCHF
R 2: 1.1138
R 1: 1.0676
CURRENT: 1.0301
S 1: 0.9739
S 2: 0.9476

• S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot