FINANCIALS: HSBC (HSBC: A3/A-/AA-) Q4 results

Notable Large Block on Friday, the session also saw 2x the 20d average volumes in SX5E and SX7E:

• SX5E Feb 4725/4700ps traded in 83.5k.
• SX5E Feb 4900/4875ps traded ~28kx29k.
• SX5E Apr 4175/4125ps traded in 50k.

FTSE rolling puts:

• UKX Feb 6500p into Mar 6700p traded in 17kx15k.
• UKX Mar 7200p into Apr 7400p traded in 6.5kx7k.

• RES 4: $34.903 - High Oct 23 and the bull trigger  
• RES 3: $33.125 - High Nov 1 
• RES 2: $32.338 - High Dec 12 and a key resistance  
• RES 1: $30.974 - HIgh Jan 16                              
• PRICE: $30.402 @ 08:07 GMT Jan 20  
• SUP 1: $29.509/28.748 - Low Jan 13 / Low Dec 19 and bear trigger        
• SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle 
• SUP 3: $27.686 - Low Sep 6 
• SUP 4: $26.451 - Low Aug 8  

A bear cycle in Silver that started Oct 23 remains in play - for now - and recent gains appear corrective. However, the metal traded higher last week suggesting scope for a continuation near-term. An extension would expose key resistance at $32.338, the Dec 12 high. Clearance of this level would signal a reversal. On the downside, support to watch is $29.509, the Jan 13 low, and $29.748, the Dec 19 low and the bear trigger.

ECB-dated OIS price 99bps of cuts through the course of this year, little changed from Friday’s close. 2025 implied easing is heavily front-loaded, with 82bps of cuts priced through June. Today’s global market focus will be US President-elect Trump’s inauguration, and any immediate policy announcements. US tariff policy is a key source of uncertainty for the Eurozone economic outlook, and by extension ECB policy. 

• Euribor futures are flat to +1.0 ticks through the blues.
• Over the weekend, ECB Executive Board member Schnabel warned that the bank will soon need to see “whether and how much further we can lower interest rates”.
• However, although Schnabel re-iterated the importance of further services disinflation to the outlook, her overall tone around inflation came across as quite relaxed: “I would tend to say that there are still some risks that suggest that inflation could be higher. But at the moment we have the feeling that everything is going in the right direction”.
• ECB’s Holzmann maintained his hawkish bias in an interview with Politico – see our earlier write-up for more colour.
• Vujcic and Holzmann are scheduled to speak this afternoon, but speakers later this week (e.g. from the World Economic Forum in Davos) will be more closely watched for any reactions to US Policy announcements.