BASIC INDUSTRIES: Covestro (COVEGR Baa2/NR/NR): 4Q24 Results

• The Risk Off tone seems to have been supportive of the Dollar overnight and into the early European session, although Zooming out and looking at the shorter bigger picture, the Dollar is more mixed for this past Week or even Month.
• While the Pound is the standout Currency within G10s against the Greenback, up 0.97% for the past Week, looking at the 1 Month period it is still down 1.03%.
• For Today, the NOK, NZD and AUD are the worst early performers in that order.
• While the USDNOK has now jumped close to 10 big figures from Friday's low, that low print was its lowest in over a Month, since 17th Dec.
• Resistance in the USDNOK is still towards 11.3134 initially.

The Norwegian Q4 Labour Force Survey data is consistent with Norges Bank starting its easing cycle in March. While the Q4 unemployment rate was steady at 4.0%, employment growth was flat, meaning the labour force participation rate eased slightly to 72.6% (vs 72.8% prior).

• In December, the SA unemployment rate was 4.2%, up from 3.7% in November and 4.1% in October. The press release indicates that NSA unemployment rates were revised higher in August, September and November.
• Preliminary data suggests a 4.1% Y/Y growth rate in average renumeration in cash (vs 4.6% prior). We will be watchful of corroboration in other wage metrics over the coming weeks. A decline in pay growth would pull down unit labour costs, which should feed into lower services inflation, and provide scope for a more aggressive Norges Bank easing cycle than currently priced in markets (~72bps through year-end).

• RES 4: 2817.6 - 1.236 proj of the Nov 14 - Dec 12 - 19 price swing     
• RES 3: $2800.0 - Round number resistance  
• RES 2: $2790.1 - Oct 31 ‘24 all-time high   
• RES 1: $2786.0 - HIgh Jan 24      
• PRICE: $2752.9 @ 07:21 GMT Jan 27
• SUP 1: $2698.2/2668.8 - 20- and 50-day EMA values   
• SUP 2: $2614.8/2583.6 - Low Jan 6 / Low Dec 19
• SUP 3: $2564.4 - Low Nov 18 
• SUP 4: $2536.9 - Low Nov 14 and a key support 

Gold traded higher last week. A bull cycle remains in play and the recent breach of resistance at 2726.2, the Dec 12 high, reinforces current conditions. Sights are on $2790.1, the Oct 31 all-time high. A break of this hurdle would confirm a resumption of the primary uptrend. On the downside, the first key support to watch is $2668.8, the 50-day EMA. A reversal lower and a breach of this average would reinstate a bearish threat.