US OUTLOOK/OPINION: Primary Dealers See Slightly Stronger NFP And Skew To AHE

• RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
• RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
• RES 1: 95.851 - High Dec 11 
• PRICE: 95.440 @ 19:34 GMT Jan 7
• SUP 1: 95.373 - 0618 proj of the Dec 11 - 23 - 31 price swing  
• SUP 2: 95.275 - Low Nov 14
• SUP 3: 94.590 - 1.0% 10-dma envelope

The Aussie 10-yr futures contract continues to trade below the Dec 11 high of 95.851. The contract has traded through the Dec low. A stronger bearish reversal would expose 95.275, the Nov 14 low and a key support. A break of this level would strengthen a bearish theme. For bulls, a reversal higher and a breach of 95.851, the Dec 11 high, would instead reinstate a bull cycle and refocus attention on resistance at 96.207, a Fibonacci retracement point.

• WTI has gained ground today, amid signs of a tighter-than-expected prompt market. Traders are also keeping an eye on colder temperatures in the US and any impacts on production.
• WTI Feb 25 is up by 1.1% at $74.4/bbl.
• OPEC 12 output in December was 26.46m b/d, down 49k b/d on the month, according to a Reuters survey.
• For WTI futures, recent gains have exposed key short-term resistance at $76.41, the Oct 8 high. On the downside, a reversal lower would expose support at the 20-day EMA, at $71.10.
• Meanwhile, Henry Hub renewed its pull back to trade lower on the day. Despite this, prices remain supported by current cold weather, curtailed production and strong LNG export demand.
• US Natgas Feb 25 is down by 6.2% at $3.45/mmbtu.
• Spot gold has risen by 0.5% to $2,650/oz, amid reports that the PBoC expanded its gold reserves for a second month in December. Bullion held by the central bank rose to 73.29mn fine troy ounces last month, from 72.96mn previously.
• A bear threat in gold remains present, despite the latest recovery, with first firm support to watch at $2,583.6, the Dec 19 low.
• On the upside, a continuation of gains would instead signal scope for a climb towards resistance at $2,726.2, the Dec 12 high.

• Stocks continue to drift near second half lows though sell pressure appears to have lost momentum late Tuesday. Currently, the DJIA trades down 116.58 points (-0.27%) at 42590.17, S&P E-Minis down 54.5 points (-0.91%) at 5966, Nasdaq down 325.6 points (-1.6%) at 19539.81.
• Consumer Discretionary and Information Technology sectors continue to underperform in late trade, autos and broadline retailers weighing on the Consumer Discretionary sector: Tesla -4.16%, GM -2.15%, Amazon -1.93%, while Ross Stores declined 1.76%.
• Semiconductor makers pared gains from the week opener (despite incoming President Trump touting a $20B investment in AI data centers after Microsoft vowed $80B last Friday): Palantir Technologies -6.52%, Nvidia -5.13%, Super Micro Computer -3.90% while Broadcom declined 2.30%.
• On the positive side, Energy and Health Care sectors led gainers, oil and gas shares supporting Energy after crude prices drifted higher (WTI +0.61 at 74.17): Devon Energy +3.19%, Hess Corp +2.52%, Occidental Petroleum +2.11%.
• Pharmaceutical makers buoyed the Health Care sector, Moderna jumping 13.39% amid bird flu vaccine hopes, Regeneron +2.14%, Incyte +1.77%.
• Reminder, the next round of quarterly earnings kicks off mid-January with Blackrock, Bank of NY Melon, Wells Fargo, JP Morgan, Goldman Sachs, Citigroup, US Bancorp, M&T Bank and PNC all reporting between January 13-16.