INDIA: Further Decline in Food Prices Expected to Drive Moderation in Jan CPI

• The continued post-NFP themes of a weaker Euro and Pound have continued early Monday, with downside momentum picking up in recent trade. Weak risk sentiment continues to boost the Japanese yen, prompting some significant declines for cross/JPY to start the week.
• EURUSD has traded below the 1.02 handle, registering fresh cycle lows for the pair at 1.0178. With the bearish trend sequence intact, analysts will now look to 1.0138, the 1.764 projection of the Sep 25 - Oct 23 - Nov 5 price swing as the next target for the move.
• With higher European NatGas prices providing additional single currency headwinds to the aforementioned equity weakness, EURJPY is now down 0.95% on the session and is approaching the 160.00 mark.
• For sterling, 1.2100 has so far held for cable, however the pair is down 0.85% as the negative backdrop for UK assets continues to permeate. We highlighted last week how 190.60 was the first major target for the move in GBPJPY (shown below), a trendline drawn from the Aug low. This trendline has now given way, with the pullback from the Dec 30 highs extending to 4.5%. Given this development, 188.09 will now be in focus, the Dec 03 low.

Reuters reporting comments from Kremlin spokesperson Dmitry Peskov, stating that there are “no specific preparations” underway for a meeting between Russian President Vladimir Putin and US President-elect Donald Trump, appearing to counter Trump, who said at a press conference last week: “[Putin] wants to meet, and we are setting it up”.

• Peskov said on a potential Putin-Trump meeting: “There is only an understanding of the political will – we shall watch the situation.”
• On conditions for a ceasefire in Ukraine, Peskov said: “The issue of security guarantees for both Ukraine and Russia is an integral part of any possible settlement of the Ukraine conflict.”
• On US sanctions enacted on Friday, described by White House official Daleep Singh as “the most significant sanctions yet on Russia’s energy sector,” Peskov said: “It is clear that the United States will continue to try to undermine our companies… such decisions are bound to destabilize global energy, oil markets.”
• Peskov added: “We will monitor the situation and configure the companies' activities… We will seek to minimise the impact of these sanctions.”
• In a call on Friday, US President Joe Biden updated Ukrainian President Volodymyr Zelenskyy on US efforts to “surge support to Ukraine and strengthen its position vis-à-vis Russia.”
• Semafor reports that the new US sanctions “will severely curb Russian fossil fuel exports to India and China”, forcing India and China “to look to the Middle East, Africa, and the Americas for alternatives.”

Equities will be watched not only for Earnings, but Friday is also Option expiry, although these will be lower in Notional Terms than what we normally see during Quarterly Expiries - Notable Earnings:

• Wednesday:

Blackrock, BoNY, Citi, GS, JPM, Wells.

• Thursday:

TSMC, BoA, MS, United Health, US Bancorp.

• Friday:

State street.