CAPITAL GOODS: Honeywell Headlines

• The USDJPY continues to recover from its earlier low, the move higher in wider Yield is starting to be supportive.
• While the USDJPY is still a long way from its intraday high of 158.42, now at 157.75, the Yen is seeing further selling against the EUR and the AUD, with both Currencies at their respective highs.
• AUDJPY sees resistance at 99.42, and further upside momentum in the EURJPY opens to the December high situated at 164.90.

France Flash HICP for December came in below expectations at 1.76% Y/Y (vs 1.9% consensus, 1.68% prior), and 0.22% M/M (vs 0.4% consensus, -0.15% prior). Similarly the national CPI came slightly below consensus at 1.35% Y/Y (vs 1.5% consensus, 1.26% prior), and 0.23% M/M (vs 0.3% consensus, -0.14% prior). Looking at the details for the French national CPI (non-HICP):

• Services CPI (which makes up 51.6% of the national CPI index) is estimated to have softened marginally to 2.31% Y/Y (vs 2.35% in November) - the lowest level since February 2022. The M/M rate increased 0.56% M/M (-0.28% in November). The press release notes the M/M increase was driven by transport prices.
• Energy prices firmed rising 1.20% Y/Y (vs a fall of 0.66% in November).
• Whilst the upside was restricted by a slowdown in Food CPI to 0.02% Y/Y (vs 0.19% in November) - making it the lowest since June 2021, and a pronounced drop in Manufactured Products of -0.43% Y/Y from -0.26% in November.
• Tobacco CPI remains stable at 8.74% Y/Y.

• In the equity space, a bear threat in the S&P E-Minis contract remains present despite the most recent gains. 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.
• A bull cycle in the EUROSTOXX 50 futures contract remains intact. Yesterday’s strong rally highlights a reversal of the recent corrective pullback and attention is on resistance at 5040.00, the Dec 9 high. Clearance of this level would confirm a resumption of the bull cycle that started on Nov 21 last year. Initial firm support lies at 4921.43, the 50-day EMA.