ENERGY SECTOR: Shell Headline

• RES 4: 137.75 Low Dec 10            
• RES 3: 135.15 High Dec 13 
• RES 2: 134.59 20-day EMA
• RES 1: 133.79 High Dec 27                
• PRICE: 133.44 @ Close Dec 30
• SUP 1: 132.71 Low Dec 30   
• SUP 2  132.00 Low Nov 6 and key support               
• SUP 3: 130.78 123..6% retracement of the Nov 6 - Dec 2 bull leg
• SUP 4: 130.00 Psychological round number     

The trend cycle in Bund futures remains bearish and last Friday’s sharp sell-off reinforces current conditions. The contract has traded through 133.22, 61.8% of the Nov 6 - Dec 2 bull cycle. This paves the way for an extension towards key support at 132.00, the Nov 6 low. Initial resistance is seen at 133.79, the Dec 27 high. Key short-term resistance is at 134.59, the 20-day EMA. Gains are considered corrective - for now.

APAC equity markets are generally lower in holiday-thinned trading as risk sentiment deteriorated following disappointing China manufacturing PMI data, although non-manufacturing surprised to the upside. US S&P and NASDAQ futures are down around 0.1% after the main indices fell on Monday. The USD index is slightly lower.

• The Hang Seng is the only main index that is higher today rising 0.1%. China’s CSI 300 fell 0.6%.
• The ASX closed down 0.9% driven by real estate and consumer durables, while energy was one of only two sectors to rise. NZ was also weak with the NZX 50 down 1.2%.
• Malaysia, Singapore and India are all lower.
• Japan, South Korea and Thailand are closed. New Zealand and Australia shut early.
• Other early finishes include Hong Kong at 12:00, Philippines at 11:55 and Singapore at 12:00.
• Germany, Italy, Switzerland, Sweden and Norway have holidays, the UK closes at 12:30 and France at 14:05.
• US October house price data and December Dallas Fed print later. 

Currency moves have been muted during today’s APAC trading given Japan, South Korea and Thailand are closed and volumes are generally light. The USD BBDXY index is off its intraday low to be down moderately. A deterioration in risk appetite has weighed on Aussie and Kiwi while benefiting the yen, as China’s December manufacturing PMI printed below expectations and is only just above the breakeven-50 mark.

• The yen outperformed the G10 on Monday and today USDJPY is down 0.3% to 156.40, close to the intraday low.
• AUDUSD is down 0.1% to 0.6215 after a low of 0.6211 earlier as the softer China manufacturing PMI and commodity/equity prices weigh. AUDJPY is 0.4% lower at 97.20.
• Kiwi has underperformed Aussie with NZDUSD down 0.2% to 0.5630 after a low of 0.5627. AUDNZD is 0.1% higher at 1.1040 after falling to 1.1024 early in trading.
• European currencies are little changed with EURUSD at 1.0407 and GBPUSD 1.2549.
• USDCNH fell to 7.3053 after the yuan fixing below Monday’s level. It is now flat on the day.
• Equities are generally weaker with the CSI 300 down 0.6%, ASX -0.9% but Hang Seng up 0.1%. The S&P e-mini is slightly lower. Copper is down 0.3% and iron ore down towards $100/t.
• Germany, Italy, Switzerland, Sweden and Norway have holidays, the UK closes at 12:30 and France at 14:05.
• US October house price data and December Dallas Fed print later.