FINLAND AUCTION RESULTS: ORI Operation

• In FX, the trend condition in EURUSD remains bearish and Monday’s strong gains appear - for now - corrective. Last Thursday’s sharp sell-off reinforces current conditions and note too that moving average studies remain in a bear-mode position, highlighting a dominant downtrend. The 20-day EMA, at 1.0412, has been pierced. The next resistance to watch is 1.0458, the Dec 30 high.
• The sharp sell-off in GBPUSD last Thursday confirmed a resumption of the medium-term downtrend. The move down maintains the bearish price sequence of lower lows and lower highs and note that moving average studies are in a bear-mode position, highlighting a clear downtrend. Monday’s strong gains are - for now - considered corrective. Initial firm resistance at 1.2558, the 20-day EMA, has been pierced. The 50-day EMA is at 1.2680.
• USDJPY bulls remain in the driver’s seat and today’s fresh cycle high reinforces current bullish conditions. The recent breach of 156.75, the Nov 15 high, confirmed a resumption of the uptrend and has paved the way for a move towards 159.45, the Jul 12 high. Initial firm support is 156.05, the 20-day EMA.

• 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.