USD: Another Volatile Overnight session for the Yen
* The Dollar is on the front foot this morning and is extending gains against the {r2} Pound, but ...
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EQUITY TECHS: E-MINI S&P: (H5) Bear Threat Still Present For Now
- RES 4: 6194.19 1.236 proj of the Aug 5 - Sep 3 - Sep 9 price swing
- RES 3: 6178.75 High Dec 6 and key resistance
- RES 2: 6163.75 High Dec 16
- RES 1: 6068.25/6107.50 High Jan 6 / High Dec 26
- PRICE: 6013.50 @ 07:28 GMT Jan 7
- SUP 1: 5911.25/5866.00 Low Jan 3 / Dec 20
- SUP 2: 5811.65 38.2% retracement of the Aug 5 - Dec 6 bull leg
- SUP 3: 5784.00 Low Nov 4
- SUP 4: 5698.25 50.0% retracement of the Aug 5 - Dec 6 bull leg
A bear threat in the S&P E-Minis contract remains present despite the most recent gains. The reversal lower from the Dec 26 high, highlights the end of the Dec 20 - 26 correction. Attention is on 5866.00, the Dec 20 low and a key S/T support. Clearance of this level would strengthen a bearish theme. Initial firm resistance is 6107.50, the Dec 26 high. A breach of this hurdle would highlight a bull reversal and open key resistance at 6178.75, the Dec 6 high.
CHF: Edging lower post Swiss CPI
- The Swissy is turning offered, after core and Harmonized Swiss CPIs came below expectations.
- The Currency has pared its small overnight gains to test the intraday low against the Dollar and the EUR, with braoder selling going through.
- USDCHF is now back to flat against the USD, and is the only Currency that trades in the red versus the Dollar in G10s.
STIR: 100bp OF ECB Cuts Priced Through '25 Ahead OF EZ Inflation Data
EUR STIRs little changed vs. settlement levels.
- ECB-dated OIS showing ~24bp of cuts for this month and ~100bp through year-end, with the latter 15-20bp less dovish than levels seen ahead of the Christmas break.
- Euribor futures +1.0 to -0.5.
- Flash national (headlined by France & Italy) & Eurozone CPI data dominates the European schedule this morning.
- Headline Y/Y Eurozone CPI is expected to tick up to +2.4% from +2.2%, while the core Y/Y rate is seen steady at +2.7%.
- Yesterday’s German CPI data presents upside risks to the release, with the move higher in German services inflation particularly noteworthy.
- The results from the ECB’s latest inflation expectations survey are also due to cross.
ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Current Effective €STR Rate (bp) |
Jan-25 | 2.675 | -24.2 |
Mar-25 | 2.404 | -51.3 |
Apr-25 | 2.218 | -69.9 |
Jun-25 | 2.081 | -83.6 |
Jul-25 | 2.032 | -88.5 |
Sep-25 | 1.965 | -95.3 |
Oct-25 | 1.933 | -98.4 |
Dec-25 | 1.916 | -100.1 |
