SOUTH KOREA: FX Reserves Decline Following Political Turmoil. 

The US bank on property developments and the policy/CNY outlook into early 2025. 

Goldman Sachs: Property sales higher than year-ago levels: Our latest high-frequency tracker shows that both new and existing home sales are notably above year-ago levels in top-tier cities. For example, the 30-city daily new home sales have increased nearly 40% yoy and the 16-city daily existing home sales have risen more than 50% yoy. These are consistent with the views of our property equity research team and our own research that China's property market stabilization will likely be led by top-tier cities. That said, given the significant inventory overhang in lower-tier cities, property prices at the national level have further room to fall and homebuilding activity is likely to remain depressed for years to come.

Policy news: Although more details about this year's monetary and fiscal arrangements will only be unveiled at the "Two Sessions" in early March, recent policy announcements provided some clues. The Q4 Monetary Policy Committee (MPC) statement pledged to accelerate credit extension in early 2025 and to cut RRR and the policy rate at the appropriate time. Interestingly, the emphasis on FX management changed from "flexibility" (弹性) to "resilience" (韧性), suggesting a shift toward controlling the speed of depreciation upon US tariff announcements. On January 3, the National Development and Reform Commission (NDRC) held a press conference and announced that the government-subsidized consumer goods trade-in program will be expanded to products such as smart phones, computer tablets and smart watches in 2025."

The highlights of the week are likely to be November CPI on Wednesday and retail sales on Thursday. There are no RBA events.

• Today final December S&P Global composite/services PMIs print. The preliminary reads were very close to the breakeven-50 level at 49.9 and 50.4 respectively, implying little if any growth.
• November CPI is released on Wednesday and is likely to be watched closely ahead of Q4 data on January 29. It will also include more updates for services components than the October release. Bloomberg consensus is forecasting headline to pickup 0.1pp to 2.2%. Trimmed mean was 3.5% the previous month.
• Retail sales for November are on Thursday and forecast to rise 1.0% m/m after 0.6% but that would see the annual rate drop due to base effects. This would be the 8th consecutive non-negative reading though suggesting some recovery. The series is due to be replaced by household spending around mid-year. The November update is out on Friday and projected to rise 0.6% m/m to be up 2.5% y/y after 0.8%/2.8%.
• November building approvals are out on Tuesday and are expected to fall 1.0% m/m after the sharp 4.2% increase in October. The multi-dwelling component can make this series volatile.
• December employment is published on January 16 but before then Q4 job vacancies are released on January 8. They have fallen every quarter since Q3 2022.
• Also on Thursday November trade data print with the surplus expected to narrow slightly to $5.55bn. Lower commodity prices have weighed on export growth.

NZD/USD was a little firmer in Friday trade, up a little over 0.30%, as broader USD sentiment faltered. The BBDXY slipped 0.14%, while the DXY lost 0.40% for Friday's session. NZD/USD has been supported sub 0.5600, since testing below this level at the end of 2024. We last track near 0.5615/20 in early Monday dealings today. NZD/USD lost nearly 0.40% last week, for its fifth straight weekly loss. 

• A clean break sub 0.5600 could see 2022 lows tested around the 0.5510/15 region. 2020 lows were just under 0.5500. On the topside, the descending 20-day EMA rests near 0.5680. Moves to this resistance level have drawn selling interest since early Oct last year.
• Broader USD sentiment stayed on the front foot last week, with focus on EUR/USD downside risks (1.00 potentially in play), while USD/CNH tested above 7.3600.
• US yields remained elevated, although more so at the back end of the curve. The real US 10yr yield close to 2.30% and near 2024 highs. Fed officials stated late last week that the fight against inflation isn't over.
• US equity sentiment ended last week positively though, likely providing some NZD support at the margins. The AUD/NZD cross tested above 1.1100 but sits back around 1.1065/70 in early dealings today.
• The local data calendar is empty until tomorrow's ANZ commodity price update for Dec.