Hotforex London Escritório Aluga

Uma indústria virando centenas de milhões de dólares, empregando milhares de pessoas, está cynically traindo ingênuo would-be investidores em todo o mundo através de uma série de práticas corruptas. Ele está fazendo terríveis danos às suas vítimas e corre o risco de fazer o mesmo com a reputação de Israel Quando Dan Guralnek imigrou da Austrália para Israel em 2012, ele não antecipou se envolver em uma fraude internacional na Internet. Eu sempre quis me mudar para Israel, diz Guralnek, que freqüentou uma escola judaica em Sydney. Ele estava trabalhando na administração de uma fábrica na Austrália quando seu chefe morreu de repente, e, aos 28 anos, ele percebeu que era um bom momento para ele se mudar para Israel. Eu pensei, Im livre, sem ataduras, eu posso ir. Guralnek matriculou-se em Jerusalém Ulpan Etzion para aprender hebraico, em seguida, mudou-se para a vibrante e movimentada cidade de Tel Aviv, onde ele conseguiu uma série de salários mínimos para NIS 25 (um pouco mais de 6) uma hora: cortar legumes em um restaurante, Dirigindo uma pessoa com deficiência, trabalhando o turno da noite em um hot-dog stand. Mas em uma cidade com aluguéis altos e um acost da vida relativo aos salários (PDF) em segundo somente a Japão, Guralnek não poderia sobreviver. Ele ouviu que empregos em uma indústria chamada opções binárias pagavam duas vezes o que ele estava ganhando, além de comissão. Seu jogo e eram um bookie ex-vendedor de opções binárias Assim que eu comecei a procurar um emprego, eu estava recebendo chamadas de empresas de opções binárias todos os dias, ele lembra. Dominam o espaço da propaganda do trabalho. Nem Guralnek ter qualquer dificuldade de aterrar um trabalho Você entra e eles fazem um grande show como theyre avaliar ou não eles querem você. Mas eles querem você. No dia em que Guralnek entrou nos luxuosos escritórios de seu novo empregador na cidade litorânea de Herzliya Pituah, ele sabia que ele havia chegado. Havia café grátis, comida gratuita, diz Guralnek. Meu salário era de 7.500 shekels (1.900) por mês, mais comissão. Guralnek estava em um call center com cerca de 50 funcionários, muitos dos quais eram novos imigrantes fluentes em uma variedade de idiomas. Seu trabalho era chamar as pessoas ao redor do mundo e persuadi-las a investir em um produto financeiro ostensivo chamado opções binárias. Os clientes seriam incentivados a fazer um depósito para enviar dinheiro para sua empresa e, em seguida, usar esse dinheiro para fazer negócios: Os clientes iriam tentar avaliar se uma moeda ou commodity iria para cima ou para baixo nos mercados internacionais dentro de um determinado período curto de Tempo. Se eles previam corretamente, eles ganharam dinheiro, entre 30 e 80 por cento da soma que tinham posto para baixo. Se eles estavam errados, eles perderam todo o dinheiro que colocaram nesse comércio. Guralnek logo viu que quanto mais negócios um cliente fazia, mais perto eles passavam a perder a totalidade de seu depósito inicial. Ele tinha sido instruído a apresentar a opção binária como um investimento e ele mesmo como um corretor, mesmo sabendo que eles provavelmente perderiam todo o seu dinheiro. O cliente não está realmente comprando nada. O que hes que compra é uma promessa de nossa companhia que nós pagá-lo-emos. Seu jogo e eram um bookie, diz agora. Antes de começar o trabalho, a empresa deu a Guralnek um curso de vendas de uma semana em que ele foi ensinado o suficiente conhecimento financeiro para soar bem a um cliente que sabia menos do que ele. Ele também foi instruído em táticas de vendas de alta pressão. Eles nos ensinaram como fazer as pessoas desconfortáveis, como responder a objeções, como mantê-los no telefone. A sessão de treinamento era conhecida como um curso de conversão e o objetivo era aprender a transformar uma ligação de telefone em um cliente, tendo seu primeiro depósito. Em sua empresa, os vendedores não foram autorizados a tomar um depósito de menos de 250. Durante o curso de vendas, a gestão da empresa deu aconselhamento Guralnek que assombrou mais tarde. Eles nos disseram para deixar nossa consciência na porta. É isso legal Como as semanas passaram, mais e mais perguntas formadas em questões mente Guralneks que sublinhou o bizarro netherworld financeiro que ele tinha entrado. Por que ele não sabia os sobrenomes de seus gerentes Por que os trabalhadores eram proibidos de falar hebraico ou trazer celulares para o call center Quem era o CEO da empresa Por que estava tudo bem para a equipe árabe-israelense vender opções binárias em lugares como a Arábia Saudita enquanto outros Países como Israel, Estados Unidos e Irã estavam fora do limite. Pior ainda, Guralnek começou a suspeitar de que, além das pobres probabilidades que os clientes tinham de realmente fazer algum dinheiro, e além das agressivas táticas de vendas, o que a empresa estava fazendo era francamente ilegal. Por exemplo, cada vendedor foi convidado a inventar um nome falso e biografia. O call center usou a tecnologia de Voz sobre Protocolo de Internet (VoIP), que exibia um número de telefone local para clientes em qualquer parte do mundo. O site da empresa listou um endereço em Chipre. Foi-me dito para dizer às pessoas que eu tinha anos de experiência no mercado, que eu tinha estudado em Oxford e trabalhou para o Bank of Scotland. Guralnek diz que ele foi dito para apresentar-se como um corretor que fez uma comissão sobre os comércios e enfatizar quanto dinheiro o cliente poderia fazer enquanto minimizar o risco. Na verdade, ao invés de ajudar os clientes a fazer negócios inteligentes, o verdadeiro interesse dos corretores era que eles fizessem previsões mal sucedidas e perdessem seu dinheiro. Guralnek diz que ele também estava cada vez mais preocupado com o que aconteceu quando os clientes tentaram parar. Isso é quando eles seriam solicitados para um monte de papelada. Nós diriam, Você quer retirar OK. Precisamos verificar sua identidade antes de liberar os fundos. Você precisa nos enviar uma fotocópia de sua conta de serviço público, sua carteira de motorista, seu passaporte, os requisitos do seu cartão de crédito, escusado será dizer, que não tinha sido mencionado quando o cliente colocar dinheiro dentro. Enquanto o cliente estava reunindo e apresentando esta papelada, um agente de retenção iria chamá-los e passar por seus negócios, supostamente descobrir o que deu errado e convencê-los a continuar a negociação. Poderíamos atrasar essa retirada por um longo tempo. Por que eu deveria ser culpado por vender algo para pessoas estúpidas Se alguém tem mais de 18 anos e quer álcool, cigarros, uma faca, uma conta opção binária, é sua própria responsabilidade Facebook post Se um cliente foi persistente, diz Guralnek, muitas vezes a empresa Parar de tomar suas chamadas, ou enviar-lhes um e-mail dizendo que suspeitamos que você de fraude e congelar todos os seus fundos. Porque o cliente não sabia o nome real ou a localização de seu vendedor, eles não tinham para onde procurar o dinheiro de volta, explica Guralnek. Mas a parte mais terrível do trabalho para o jovem imigrante era pedir dinheiro a pessoas que pareciam pobres e desanimadas. Eles acreditam que estão fazendo algo de bom: eles estão fazendo um investimento, fazendo algo responsável. E eles não. Cada história é triste. Everyones tem pessoas dependendo deles. Muitas pessoas estão finalmente ficando de pé depois de um problema de drogas ou algo assim. O pior foi quando um cliente lhe disse, Im no hospital. Quando alguém diz que eu estou no hospital e eu tenho câncer, era suposto ainda vendê-los. Mas eu iria jogar a venda de cada vez. Eu não poderia fazê-lo. Uma indústria vasta e desonrosa Se você digitar as palavras binárias ou forex em grupos do Facebook que atendem a novos olim (imigrantes para Israel), você encontrará longos segmentos de trocas aquecidas. Qualquer um de vocês que estão envolvidos em opções de Forex / Binário perceber que este é um negócio altamente desregulamentado que está solicitando jogos de azar para pessoas mal informadas ou sem instrução lê um desses postos no popular Secret Tel Aviv grupo. Por que eu deveria ser culpado por vender algo para pessoas estúpidas uma mulher responde. Se alguém tem mais de 18 anos e quer álcool, cigarros, uma faca, uma opção binária conta, é sua própria responsabilidade. Você vendê-lo a sua avó o cartaz original ateia fogo para trás. No grupo Keep Olim no Israel Movimento Facebook, uma mulher escreve, Olá a todos, alguém pode me explicar o que são Binário e Forex empregos e por que as pessoas são tão anti-trabalhando nessas indústrias em Israel Este campo é desonroso, lê uma resposta. Ive feito isso e eu senti nada, mas vergonha e auto-repugnância para perseguir as pessoas que nunca pediram para esta chamada e tentar obter dinheiro com eles que theyre improvável que nunca voltar. Se você não gosta d, não o faz, lê outro. Trabalhe o que você sente é um trabalho honesto, faça seus 6.000 shekels (aproximadamente 1.500) um o mês leva embora, gaste-o metade na renda e vive como um roedor com o descanso dele. Ele continua, Enquanto a indústria binária e Forex e eu pagar 50 impostos sobre os nossos salários para pagar os seus cuidados de saúde, segurança social e segurança, posso falar por todos nós, não precisamos ser julgados. Ninguém parece saber exatamente o quão grande as opções binárias e as indústrias de forex estão em Israel. Nem mesmo a Autoridade de Valores de Israel, que, quando colocada a questão, respondeu via mensagem de texto, Como a indústria ainda não está regulamentada, não temos a imagem completa. Mas estimativas conservadoras colocam o número de pessoas empregadas na indústria em vários milhares, principalmente em Tel Aviv e seus subúrbios como Herzliya e Ramat Gan, enquanto a receita anual pode ser de centenas de milhões para mais de um bilhão de dólares. Globalmente, o termo forex normalmente se refere ao comércio legítimo em moeda estrangeira, enquanto opções binárias é o nome de um instrumento financeiro. No jargão popular israelense, no entanto, opções binárias e forex são muitas vezes aglomeradas como parte da mesma indústria: Quando os israelenses se referem a empresas de forex, que muitas vezes significam empresas que trocam as opções binárias em moedas. Às vezes, os termos Forex e opções binárias são usados ​​indistintamente para se referir a negociações rápidas, tudo ou nada em uma série de ativos. Em algumas empresas de opções binárias, a plataforma on-line é manipulada para fornecer resultados falsos que garantam o cliente perde O processo de negociação pode funcionar da seguinte forma, disse o Times de Israel. Tendo transferido o seu primeiro depósito financeiro para a empresa, os clientes entrar em uma plataforma de negociação on-line, conforme orientado pelos vendedores da empresa, e colocar dinheiro em uma previsão de que o preço de uma moeda ou commodity vai subir ou descer nos mercados internacionais, Digamos, os próximos cinco minutos. Se o cliente prevê corretamente, ele faz um lucro de uma certa percentagem ea empresa perde dinheiro. Se o cliente está errado, ele perde todo o dinheiro que ele colocou no comércio, ea empresa mantém. Os comerciantes de opções profissionais consultados pelo The Times de Israel disseram que mesmo um gênio financeiro não pode prever com alguma confiança o que, digamos, o preço do ouro vai fazer nos próximos cinco minutos, em vez de um investimento, a transação é realmente nada mais do que um jogo. A deturpação do jogo como investimento responsável seria bastante ruim. O que é pior, porém, e descaradamente corrupto, o Times de Israel foi dito, é que, em algumas empresas, a casa está dobrada. Uma variedade de ruses são usados. O pagamento potencial para uma previsão correta é complexo, opaco e calculado para minimizar a perda da empresa. Se um ativo está se comportando de forma previsível, digamos, o preço do cobre começa a subir após um terremoto no Chile, a empresa vai puxar esse ativo da plataforma on-line. Em algumas empresas de opções binárias, a plataforma on-line é manipulada para fornecer resultados falsos que garantem que o cliente perde. Estimativas do número de opções binárias e empresas de forex em Israel variam de 20 a várias centenas. O Centro de Pesquisa IVC, uma empresa que fornece informações sobre o setor de tecnologia de Israel, estimou em seu anuário de 2015 que existem 100 empresas de comércio on-line em Israel, cuja esmagadora maioria se enquadra nas categorias de opções forex e binárias. A IVC estima que essas empresas empregam mais de 2.800 pessoas em Israel. No entanto, o anuário afirma, é difícil avaliar o tamanho real da indústria financeira on-line de negociação em Israel, em parte porque a indústria é low-key e seu nexo Israel é muitas vezes subestimado. Um relatório de 2014 sobre a indústria de Internet israelense pela incubadora startup TheTime diz que das 90 empresas de Internet israelenses que ganham uma receita de 10 milhões ou mais por ano, 15 eram plataformas de negociação on-line, muitas delas negociação forex e opções binárias. Três destes, de acordo com o relatório Ava, Mercados e Plus500, todos os quais têm escritórios em Israel foram avaliados para ter uma receita de pelo menos 100 milhões por ano. Algumas outras empresas na lista incluíam iForex, bForex, AnyOption, 4XPlace, Optionbit e Banc de Binário. Com base nessas avaliações, a indústria israelense de divisas e opções binárias tem um faturamento anual de centenas de milhões, possivelmente bilhões, de dólares. Quantos são fraudulentos É anyones acho que a percentagem de empresas de comércio financeiro on-line envolver-se em práticas antiéticas, ilegais e / ou fraudulentas. Uma distinção que muitas pessoas entrevistadas para este artigo atraiu foi entre empresas não regulamentadas e regulamentadas. Plus500 Ltd. é negociado na Bolsa de Valores de Londres, que pode transmitir legitimidade. Várias outras empresas grandes e mais conhecidas com fundadores israelitas ou grandes operações de vendas e marketing em Israel são regulamentadas em Chipre, o que lhes dá licença para vender produtos financeiros em países da UE, mesmo que não estejam regulamentados nesses países. Muitas empresas de forex e opções binárias operando em Israel, no entanto, não são regulamentadas. Sam C., um imigrante recente de Israel dos Estados Unidos, descreve sua experiência trabalhando em uma empresa de opções binárias não regulamentada no verão passado. Muitos clientes tinham clicado em um anúncio hawking maneiras de ganhar dinheiro em casa. Eles realmente acreditam que theyre vai se tornar um milionário só por fazer este serviço anterior cliente staffer em uma empresa de opções binárias Eles tornam extremamente, extremamente difícil para os clientes a retirar o seu dinheiro, diz Sam, que trabalhou no serviço ao cliente e que pediu que o seu Nome real não deve ser usado. Você tem que encontrar uma cópia de sua licença de excitadores, uma cópia de sua conta de serviço público e há assim muitas réguas e exigências. Metade dos telefonemas que eu tinha que lidar com eram apenas pessoas queixando-se, dizendo que seus meses foram e eu preciso do meu dinheiro agora. Preciso pagar por isso ou aquilo. Praticamente a empresa simplesmente se recusa a desistir. Na verdade, Sam diz que não pode confirmar que qualquer cliente já recebeu pagamento ou retirou seu dinheiro durante seus poucos meses de trabalho na empresa. As pessoas ligariam e ligariam de volta. E, eventualmente, às vezes um de meus gerentes diria, não tome que chamadas de pessoas mais e fechar sua conta. Eles diriam, Foram feitos com ele e todo o dinheiro não importa. Não ligue para ele mais. A maioria dos clientes da empresa Sams era dos Estados Unidos, embora seja contra a lei dos EUA para as empresas venderem opções binárias para os cidadãos dos EUA desta forma. Outros clientes eram da África, Qatar e Arábia Saudita. Muitos haviam clicado em um anúncio hawking maneiras de ganhar dinheiro a partir de casa ou assistiram a um vídeo que alegou revelar estratégias secretas de investimento. A maioria parecia ser a pessoa burra estereotipada, lembra Sam. Você nem sequer percebe que pessoas assim existem fora dos filmes. Eles realmente acreditam que theyre vai se tornar um milionário apenas fazendo isso. E é quase triste. Perguntado sobre seus gerentes, Sam disse que eles eram jovens israelenses que pareciam pensar que era legal rasgar as pessoas. Eles pareciam ter visto o Lobo de Wall Street e queriam imitar os personagens. A brincadeira que eles teriam, seria como, oh yeah, eu não posso acreditar que ele caiu para que, eu não posso acreditar que você tem que ele investir 300. Sam diz que um de seus gerentes realmente citação Leonardo DiCaprios vendas arremessos do filme verbatim pelo telefone Ao tentar vender opções binárias. Olá john. Como você está fazendo hoje? Você enviou minha empresa algumas semanas atrás, solicitando informações sobre um investimento que teve enorme potencial de crescimento com riscos de baixa muito pouco, ele iria citar de memória. Isso soa um sino eu pensei que era uma espécie de patético, para ser honesto, lembra Sam. Manipulação de software Em 2013, os Estados Unidos proibiram o marketing de opções binárias para seus cidadãos, exceto em um punhado de trocas reguladas. Em seu site, a Commodity Futures Trading Commission (CFTC), uma agência independente do governo dos EUA, alerta os investidores para esquemas fraudulentos envolvendo opções binárias e suas plataformas de negociação. Estes regimes alegadamente incluem a recusa de crédito contas de clientes, negando reembolso de fundos, roubo de identidade e manipulação de software para gerar negócios perdedores. As opções binárias de negociação podem ser uma proposição extremamente arriscada, adverte outra agência reguladora americana, a Financial Industry Regulatory Authority (FINRA), em seu site. Ao contrário de outros tipos de contratos de opções, diz FINRA, uma SRO que regula empresas corretoras de membros e mercados de câmbio, as opções binárias são proposições de tudo ou nada. Quando uma opção binária expira, ou faz uma quantidade pré-especificada de dinheiro, ou nada em tudo, caso em que o investidor perde todo o seu investimento. A negociação de opções binárias torna-se ainda mais arriscada por esquemas fraudulentos, muitos dos quais se originam fora dos Estados Unidos. Em Israel, muitas empresas de forex são realmente vendendo opções binárias, o que significa que um cliente aposta sobre se uma moeda vai subir ou descer, em vez de comprar a moeda, Jared K., um ex-corretor de Wall Street explica ao Times de Israel . Tradicional forex é eu comprar em 3,50, eu vender em 3,60. Binário forex (ou seja, forex no mundo das opções binárias) está dizendo se ele vai para 3,60 eu ganhar dinheiro, vamos dizer 20 mais do que eu aposto, mas se ele vai para 3,50 ou inferior, eu perco. A negociação de opções binárias torna-se ainda mais arriscada por esquemas fraudulentos, muitos dos quais se originam fora dos Estados Unidos. O governo dos EUA adverte Graham P., que atualmente trabalha em marketing para uma grande empresa de opções binárias regulada por Chipre em Tel Aviv. Manipular software como descrito pela CFIC cínica intervenção por empresas de opções binárias para garantir que eles ganham, o equivalente industrys de uma roleta fraudada roleta em um cassino. Falei com um cara que eu estava potencialmente indo para trabalhar, e ele tinha realmente desenvolvido uma plataforma de opções binárias. Disse que todos que se encontrou que era interessado em comprar a plataforma (para começar sua própria companhia) o quis criar uma porta traseira. Por porta traseira, Graham significa que as empresas querem ser capazes de manipular um comércio no último minuto, se um cliente ou grupo de clientes parece estar ganhando muito. Vamos dizer que 70 por cento dos comerciantes são, por algum motivo apostando que o petróleo vai subir. Então, as empresas dizem, gee, se fizermos apenas 30 por cento vitória, bem ser capaz de manter muito mais dinheiro. E o algoritmo faz isso. É muito fácil dizer ao cliente, oh, a linha caiu um pouco abaixo de sua posição. Se o cliente trouxer a prova de que o preço do petróleo realmente subiu para onde eles predisseram, a empresa irá apontá-los para a impressão fina, que afirma que a empresa tem seus próprios algoritmos que podem diferir do tempo real. As taxas de negociação atribuídas aos ativos em nosso site são aquelas em que nossa empresa está disposta a vender opções binárias para seus clientes no ponto de venda, lê um disclaimer típico em muitos sites de opções binárias. Como tal, eles podem não corresponder diretamente aos níveis de mercado em tempo real no momento em que ocorre a venda de opções. Graham, cuja empresa é regulamentada em Chipre, disse que, em sua opinião, toda a indústria de opções binárias é fraudulenta. Em caso afirmativo, isso representa uma corrupção cínica e sistemática em grande escala, diminuindo escândalos tão nocivos como a venda ilegal de produtos do Mar Morto por israelenses em quiosques em shoppings de todo o mundo, que permitiram sem conspiração florescer, com repercussões extremamente graves para Israel. Por alguma razão louca é legal na Europa. Nações europeias individuais estão deixando opções binárias voar. Enquanto países como os Estados Unidos cheirava a besteira há muito tempo e a tornava ilegal. Graham disse que em um instante, ele gostaria de ver a indústria fechada, mas ele está preocupado. Há tanto dinheiro derramando na cidade é literalmente uma indústria aqui Im incluindo forex também. Provavelmente pagando pelo sistema de metrô estava instalando. Você pode imaginar milhares de pessoas em Tel Aviv sem trabalho Uma má reputação Chaya Berkowitz, uma veterana de oito anos de empresas de forex em Israel, diz ao Times de Israel que sua própria experiência na indústria tem sido boa. Eu não sou alheio. Estou ciente de que tem uma reputação muito ruim. Eu não acho que isso é 100 por cento justificado. Berkowitz afirma que existem empresas legítimas na indústria, e chocalhos fora os nomes FXCM, Alpari e FXPro, nenhum dos quais são baseados em Israel. Se você tem dez empresas de forex, provavelmente seis ou sete deles têm reputações ruins que dão aos outros um nome ruim. É lamentável porque os outros levam seus negócios a sério e se preocupam com seus clientes, diz ela. Questionado se esses seis ou sete são culpados de fraude, diz Berkowitz, eu não diria que eles estão cometendo fraude. Eles têm a reputação de mentir para seus clientes e publicidade enganosa. Isso definitivamente existe, mas há uma razão algumas das grandes corretoras ainda estão por perto. É porque eles costumam jogar pelo livro de outra forma eles não são por muito tempo. Berkowitz estima que em empresas de forex legítimo, dois ou três de cada 10 clientes ganham lucros e são capazes de retirar facilmente seu dinheiro. Perguntada como saber se uma empresa é legítima, ela diz, eu procuraria uma regulação mais dura, e não uma empresa regulamentada em alguma ilha em algum lugar, mas regulamentada no Reino Unido, nos Estados Unidos ou na Austrália. Chipre, ela afirma, tornou-se mais rigorosa nos últimos anos. Está se tornando uma agência reguladora mais reconhecida. Gostaria também de pedir amigos ou outros investidores. Palavra pessoal da boca é enorme. Eu faria meu dever de casa. Olhe em linha para ver quem tem uma boa reputação. Gostaria de fazer perguntas ao pesquisar um corretor. Eu tenho acesso fácil ao meu dinheiro Você oferece educação Reeling os clientes em Depois de obter seu mestrado em Israel e casar com um israelense, Lynne R. um nativo californiano, começou a procurar um emprego, mas ficou desapontado com o que estava lá fora. Foi realmente chocante para mim, uma vez que eu comecei a ir para as empresas, para descobrir quão baixo os salários eram. Eu queria encontrar algo mais competitivo, mais semelhante ao que eu estava ganhando nos Estados Unidos. As pessoas continuaram mencionando a Lynne que os empregos de opções binárias pagavam bem. Ela postou o fato de que ela estava olhando para um casal sites de trabalho no Facebook, e eu provavelmente tinha 25-30 pessoas chamada para criar entrevistas. Lynne foi em cinco ou seis entrevistas, onde aprendeu que era elegível para dois tipos de trabalhos. Theres conversão e retenção. Para os trabalhos de conversão eles estavam me dizendo que eu faria cerca de 15.000 shekels (3.850) por mês e para os empregos de retenção me disseram que eu poderia fazer 30.000 a 40.000 (7.700 a 10.250) por mês. Em cada entrevista, Lynne sondou extensivamente sobre a natureza do trabalho. Cada empresa tem seus próprios métodos de marketing, muitas vezes envolvendo vídeos que contam a história de uma pessoa que aprendeu um método secreto de extrair dinheiro do mercado, diz ela. Uma empresa disse-lhe que atraiu clientes com um robô: Eles disseram, basicamente usamos um programa, que chamamos de um robô. Podemos comercializá-lo para as pessoas e dizemos que pode fazer pequenos negócios para você, como 100 ou 200, e há um programa de Internet que vai fazer, você sabe, alguns mágica e fazer algumas centenas de dólares extra por mês. O trabalho de Lynnes seria chamar pessoas que pagaram 200 para usar o robô, e persuadi-las a aprofundar seu envolvimento. Você os chama e diz, bem, você tem este robô, mas não é realmente tão grande de um programa que foi vendido a você por um afiliado nosso. Se você quiser ganhar dinheiro sério, você precisa começar a negociar, e podemos dizer-lhe como. Eram comerciantes especializados. Tudo que você precisa fazer é fazer um maior depósito, e você obterá uma conta personalizada conosco e um comerciante pessoal. Tudo que você precisa fazer é fazer um depósito de 500 e bem começá-lo começou. Lynne foi finalmente oferecido um trabalho de retenção, e foi matriculado em um curso de treinamento de duas semanas. A primeira coisa que lhe disseram foi nunca revelar que estava chamando de Israel. Todos os funcionários de retenção foram convidados a posar como corretores treinados trabalhando em um escritório em Londres. Eles foram obrigados a relembrar os dias em Londres, bem como o que estava acontecendo nas notícias. Você tinha que fazer uma biografia. Você precisava pensar em uma escola de negócios e dizer que você foi lá. Você precisava dizer que você era um comerciante, que você tinha trabalhado para um banco de investimento ou em Wall Street. Se você é uma mulher, eles incentivam você a dizer youre único, porque os caras mais provável depósito com você. Se você é um cara, você quer ter uma esposa e dois filhos, porque isso faz você relacionar-capaz. A empresa, segundo ela, estava regulamentada em Chipre. A indústria está certificada para a Europa, mas você não está fortemente regulamentada. É uma forma de ser credenciada pela UE sem muita supervisão. (Finanças Magnates, uma publicação de comércio israelense on-line de comércio financeiro da indústria, escreveu no passado que Chipre tem uma reputação de regulação lax.) Quando oferecemos treinamento para eles, gostaríamos de compartilhar seu desktop e levá-los através do site. Foi-nos dito para olhar em torno de seu desktop para pornografia ou slots on-line ou outros sinais de comportamento compulsivo, porque isso significa theyre mais propensos a fazer um depósito antigo agente de retenção de opções binárias Lynne diz que o ponto de venda de sua empresa, que se gabou, Era mais ético do que outras empresas de opções binárias. Se alguém pediu para retirar o seu dinheiro que seria dar-lhes a eles dentro de 48 horas, ela diz. Quando Lynne começou a jogar com a plataforma de opções binárias de sua empresa, ela percebeu que era divertido e viciante, quase como um jogo de azar. Havia muita adrenalina. Se você colocar dinheiro em sua conta de investimento hoje, ele pode dar-lhe 3 a 6 por cento retorna. Em binário você vê 70 por cento vindo imediatamente. Se os agentes de conversão foram esperados para obter um cliente para fazer seu primeiro depósito, agentes de retenção como Lynne foram encarregados de trazer o dinheiro grande. O primeiro passo foi dimensionar o cliente. Eles nos disseram para procurar casas de pessoas no Google Maps para ver o quão rico eles pareciam e para verificar suas informações de cartão de crédito para ver se eles tinham ouro ou platina status. Além disso, quando oferecemos treinamento para eles, gostaríamos de compartilhar seu desktop e levá-los através do site. Foi-nos dito para abusar desse acesso e olhar ao redor de seu desktop para pornografia ou slots on-line ou outros sinais de comportamento compulsivo, porque isso significa que eles são mais propensos a fazer um depósito. Você chama alguém e você diz a eles que meu nome é Jane Smith, estou chamando de Londres, onde eu sou um banqueiro de investimentos para esta empresa incrível. Im chamando para falar com você sobre o quanto você realmente quer fazer. Vemos que você investiu 300, mas nós dois sabemos que 300 não vai fazer nada para você. Então o que é que você realmente quer fazer em um ano Então as pessoas diriam, eu quero fazer 100.000. Quero comprar uma casa ou quero viajar. Eles lhe dizem algo que eles querem e então você diz, então provavelmente levará 6-8 meses para conseguir isso. Se você quiser alcançá-lo você precisa trocar todos os dias. Vou trabalhar com você. Eu vou dar-lhe informações sobre quais picaretas para fazer todos os dias. Lynne disse que o corretor faria check-in com os clientes regularmente, encorajando-os, ensinando-os sobre o mercado e oferecendo dicas. Quando o corretor escolheu um estoque para que eles apostassem, o estoque iria muitas vezes executar como prometido. Quando eles chegaram na plataforma e fizeram suas próprias escolhas, eles começaram a perder. Em seguida, o corretor iria voltar e ajudá-los a fazer algumas boas chamadas, e eles iriam ganhar novamente. Então, basicamente, você se deparar com este comerciante realmente grande, mas na realidade você está apenas tentando fazer o volume de comércios ser o mais alto possível. O próximo passo, lembra Lynne, era pedir um depósito de 10 mil. Os clientes geralmente hesitam e dizem que não há maneira que eu quero depositar 10.000. Então você pressioná-los e dizer Se você não está realmente sério sobre como ganhar dinheiro, então por que estamos conversando agora Traders tentar de tudo. Alguns são realmente doce, alguns tentam se identificar com eles, alguns tentam fazê-los sentir estranho seja qual for a técnica que os leva a depositar. A técnica favorita é dizer: Se você depositar 5.000, eu lhe darei um bônus de 5.000. Os clientes ouvem isso e dizem que é louco. Vou depositar. Mas o bônus, explica Lynne, é uma armadilha. Você não tem permissão para retirar qualquer um do seu dinheiro até que você use esse dinheiro bônus algo como 30 a 40 vezes. Vamos dizer que eu te dou um bônus de 1.000. Você precisaria trocar isso até que você fez pelo menos 30.000 lucros fora dele, e então você pode retirar seu dinheiro. Mas você nunca vai chegar a essa quantidade. Vamos dizer que você faz 10.000 fora dele e você diz que deseja retirar, no contrato vai dizer que você não pode retirar. Você pode tirar o seu dinheiro original, mas você não pode tomar o bônus ou o dinheiro que você ganhou com o bônus. Assim, os clientes ficar preso no sistema, porque eles não querem perder todo o seu dinheiro, e pelo tempo que o comércio de 30 vezes o montante do bônus, theyve perdeu tudo. Quanto mais você troca, mais dinheiro você perde, diz Lynne. Você não pode ir tão longe e ser bem sucedido. No entanto, Lynne diz novamente, com sua empresa, se você resistiu a tentação de tomar o bônus, e se você colocar em um pedido, a empresa iria enviar-lhe o seu dinheiro. Eles realmente se gabaram sobre o fato de que eles eram bons em dar às pessoas seu dinheiro imediatamente. Na verdade, eles incentivaram as pessoas a tomar pequenas retiradas. Se um cliente tivesse 10.000, diriam, por que você não toma 2.000 e toma sua esposa em uma viagem pequena seu muito calculado com quanto theyre que dá para fora e quanto leeway para tentar dar aos clientes. Lynne parou seu trabalho binário das opções logo após o curso de treinamento porque disse que não poderia estômago fazer exame das economias dos professores e dos motoristas de caminhão. Perguntada se ela pensava que o que ela tinha sido designado a fazer era antiético ou ilegal, ela responde: Era certamente antiético. Quando eu digo às pessoas sobre esse trabalho, elas ficam chocadas. Eles dizem, que nunca poderia ser legal, não há maneira que Israel jamais permitiria isso. Terrorismo econômico Em novembro de 2014, um homem com o nome de Ariel Marom, que se descreveu como um ex-funcionário de várias empresas do setor de forex, enviou uma carta fortemente redigida aos comitês de Finanças e Ética do Knesset, conforme relatado em Israels Financeiro diário Globes. Estou a pedir ao regulador responsável pelos serviços bancários e ao Comité de Finanças do Knesset que tomem imediatamente medidas para pôr fim à onda de pilhagem, roubo, fraude, lavagem de dinheiro e criminalidade em escala internacional, que é gerida e operada em Israel, Milhares de clientes em todo o mundo. Marom descreveu a indústria de forex como terrorismo econômico visando os cidadãos de muitos países. When this information becomes public knowledge through investigative reports by the media, which is bound to happen sooner or later, Israels status in the world will be damaged and it will unleash a wave of hatred toward the Jewish people and Israel, causing tremendous damage. When this information becomes public knowledge through investigative reports by the media Israels status in the world will be damaged and it will unleash a wave of hatred toward the Jewish people and Israel, causing tremendous damage letter sent to Knesset committees Marom said in the letter that he had been searching for a job in recent months and as a Russian speaker had interviewed with forex companies that operate in Israel and target customers abroad. He said he was surprised at the sheer magnitude of the fast-growing industry. There are hundreds of jobs currently available to Arabic, Russian, English, Spanish and French speakers as these companies seek new workers for their expanding departments. Marom added that after years in the traditional banking industry, he was shocked at the practices he witnessed in several forex companies. In the absence of any regulation, they are simply robbing customers. Many people compare forex to a casino, but its worse than a casino. A casino hands you your winnings immediately. Forex companies and Im talking about most of them simply do not allow people to withdraw money. Marom goes on: Many forex customers have no idea that the company operates from Israel, especially when were talking about the Arabic-speaking desks. Their complaints never reach our justice system and so the industry is not exposed. How is it possible that this has been happening for years, with no local regulation What happens when thousands of Turks, Russians, Spaniards, Italians and French figure out that the scam they fell for was carried out from here, in Israel Are our regulators waiting for synagogues to start blowing up all over the world to shut this thing down It is not clear what the Knesset Finance Committee did in response to Maroms letter. The Times of Israel tried to track Marom down, but the CEO of FeeX, a high-tech startup he used to blog for, said he had not heard from Marom for a few years and had no contact information. Maroms LinkedIn profile placed him at a high-tech company in Brazil where no one who answered the phone seemed to speak English. A phone call to an Ariel Marom listed near Haifa was answered by a woman who said her husband is an astronomer, not a finance professional. Youre the third journalist who has called looking for Ariel Marom in the last two weeks, she said. Now Im curious. The Times of Israel asked for the help of SixGill, a cybersecurity high-tech firm that specializes in the dark web, to track down Marom, but after a brief automated search, Tommy Ben-avi, a senior analyst at Sixgill, concluded that either Ariel Marom is not his real name or he doesnt want to be found. The cyber intelligence company did, however, make some interesting observations about the forex and binary options industries. Ben-avi mentioned several companies known to be operating from Israel. This industry is a bit shady. Its hard to get to the owners and CEOs of some of these companies. Most of the time, when you have a company that large, you can see the owner, you can see the shareholders. Ben-avi conducted an automatic search with a system that scours hundreds of thousands of sites and closed dark web forums. It seems like theyre trying to hide their identity. Maybe a few companies have the same owner, and they want to hide that fact, he mused. Or maybe their business is not 100 percent legitimate. How its done on Wall Street Jared K. a licensed stockbroker from the United States who now lives in Tel Aviv, says that he sees several problems with the local forex and binary options industries. On Wall Street, brokers are regulated, transactions are regulated, the money is regulated. Where is it coming from and where is it going There are rules as to how someone can access money in a claim. I am shocked that Israel hasnt shut this down US-licensed stockbroker who lives in Tel Aviv Furthermore, says Jared, in the United States, a license to sell securities or handle client investments would require a person to meet certain ethical standards. If they dont look out for the best interest of their clients investments, it is a criminal offense. On Wall Street I cant put someone in an investment that doesnt fit them. That is fraudulent. If I called up your parents and said put money in this investment and they lost it all, in theory I could be arrested and go to jail. Binary doesnt have that, there are no repercussions. What happens if someone loses money Nothing. I am shocked that Israel hasnt shut this down, he sums up. A product that invites fraud Yaron Zelekha, Israels former accountant-general, became known as the countrys foremost whistle-blower in 2007 when he exposed the financial improprieties of a sitting prime minister, Ehud Olmert. I personally would not advise any Israeli to trade with any of these companies Yaron Zelekha, Israels former accountant-general Zelekha told The Times of Israel that he doesnt want to tar all its players with the same brush, but that binary options and some instruments related to forex are designed in a way that creates a strong incentive for fraud. There is a very wide information gap between the public and these players, and they are exploiting it to their advantage. The broker is not giving you a service like in a bank he is personally betting against you. This is a flagrant conflict of interest, because youre betting on something, and the person reporting the outcome wants you to lose. Such circumstances invite fraud, says Zelekha, and there is no small number of companies that simply defraud the customer. Sometimes that fraud is very sophisticated. Asked whether the entire industry should be shut down, Zelekha responds, There is no need to throw out the baby with the bathwater, although I personally would not advise any Israeli to trade with any of these companies. What the industry does need, he says, is real-time regulation. He says there is software that can now do real-time monitoring of a companys transactions. The Israel Securities Authority (ISA) must have real-time access to these companies computer systems. Zelekha says the ISA has fought a long battle to regulate the online financial trading industry. They deserve credit for their efforts, although the regulation wont be effective if it isnt done in real time. ISA: We probably wont allow binary options The Israel Securities Authority is housed in a 1920s Eclectic-style building in one of Tel Avivs loveliest neighborhoods, near the stock exchange. Itzik Shurki, director of the ISAS Exchange and Trading Platforms Supervision, is a soft-spoken man, but he has harsh words for binary options. Shurki says a new law to regulate online financial trading industries went into effect in May 2015. The companies that wanted to continue to offer their products to Israeli customers had to request a license from the ISA. Twenty-one companies requested licenses. One was disqualified, because its controlling shareholder, Aviv Talmor, had fled to Cyprus to escape arrest for alleged financial misdeeds. Talmor has since returned to Israel and is currently under house arrest. Two other companies withdrew their applications, leaving 18. Of these, four are primarily binary options companies, while the others seek to offer other types of CFDs, or contracts for differences, as well. With binary options weve already informed the companies that our intention is probably not to approve this product Itzik Shurki of the Israel Securities Authority Almost a year later, none of the applicants has been approved. Shurki says that the industry is currently in a transition period while the ISA reviews the applicants. During this period, the 18 companies have permission to continue to operate. If we decide yes, they will become fully regulated companies if we decide no, they will have to stop their operations. Which way is the ISA leaning With binary options weve already informed the companies that our intention is probably not to approve this product. Its basis is problematic. Because ultimately I dont want to use the word gambling because it is a financial product but in the way it is offered and in the short time frame, and with all its complexity, in our view it brings it closer to a guessing game than a financial product where you can evaluate its worth. CFDs, or contracts for differences, a high-risk financial instrument that is also banned in the United States except on registered security exchanges, will be allowed in Israel, says Shurki. However, Shurki says CFDs will be regulated in real-time and aggressive or deceptive sales tactics will be rendered illegal. The ISA will monitor the prices of every product offered to make sure they are transparent and fair traders will need to be licensed and traders will also be prohibited from offering advice or tips to their customers. You cant be in a position to give advice when their earnings are your loss, Shurki explains. This all sounds quite impressive. Once the ISA makes it decision, one might be forgiven for thinking, the binary options fraudsters will be out of business. But theres a catch a great big catch that potentially excludes the overwhelming proportion of binary options trading from effective supervision in Israel: The new regulations apply only to companies that target Israeli customers. If a binary options or forex company targets customers abroad exclusively, it will not be regulated by the ISA. Thus, to ensure that the new law not apply to them, companies need only exclude Israeli clients. A quick visit to the websites of several binary options firms does indeed prompt messages saying the service is not available to Israelis. Shurki says he is aware that the new regulations will not solve the problem of call centers that are defrauding people abroad, but says that such activity is not under the ISAs jurisdiction, in the same way that the Financial Conduct Authority (FCA) only protects British citizens and the CFTC only protects Americans. If an American company tried to sell securities to Israelis, it would be our job to protect our citizens, not the Americans responsibility, he explains, although he adds that the ISA does have very good information exchanges with its foreign counterparts. Yes, but when an Israeli company steals from people in another country, is that not a crime It is a crime, says Shurki, but its not a crime for his authority to investigate. Theres no such thing as a vacuum of authority. If an Israeli commits fraud or misrepresentation, thats the purview of the Israel Police. The French connection Perhaps nowhere is the hand-wringing and acrimony over Israel-based forex and binary options trading more anguished than in the community of French Jews living in Israel. In January of this year, a cover story of the French-language Israel Magazine , a monthly glossy magazine and website serving the French-speaking community in Israel and the Diaspora, was titled, Forex, is it kosher A generation of young people is in the process of perverting themselves into worshipers of the golden calf journalist in a piece warning about Forex In the introduction to the piece, journalist Andre Darmon writes, The point of this article is not to point a finger at some of our fellow citizens or co-religionists, because the phenomenon is global, but to raise awareness that a generation of young people is in the process of perverting themselves into worshipers of the golden calf. And that earning a living does not mean everything is permissible These call centers hire lost young souls, writes journalist Ilana Mazouz in Alliance, a French-Jewish Internet magazine, many who do not speak Hebrew or English, and for a short time provide the illusion of a normal life in Israel. Some rabbis have forbidden people from working in the industry, calling it theft, while rabbinic lectures on the Internet in French bear titles like Forex, dirty work and Amalek. Again, numbers are hard to come by for how many young French speakers are employed in the industry. Didier F. a French-Jewish businessman, told The Times of Israel that after he graduated from the IDC-Herzliya, many of his fellow students were recruited by forex and binary options companies. Didier asserts that many owners of forex websites are members of a French-Jewish community of conmen who are hiding from French law enforcement in Israel, where the police, he alleges, dont bother them over-much. As previously reported in The Times of Israel, about 10 recent immigrants from France were charged last year with cyber crimes and telephone scams, while France has reportedly sent Israel 70 additional formal requests for judicial assistance for cases of suspected fraud. A movie was recently made in France about one of these alleged fraudsters. The movie is called Je Compte sur Vous, French for Im counting on you. I love when they say French aliyah has increased so much now its 7,000 people, says Didier. Its great, Im happy about it. But then you see that many of them are working in the forex industry or binary options industry. You go to Tel Aviv today, when you say to someone in the French community, I work in finance, they immediately think that you work in this shit. Adds Didier: Even if its a small amount of money, theyre stealing money from poor people. Its destroying families. Some people have killed themselves. According to a report in Le Nouvel Observateur, a French news weekly, lAutorite des Marches Financiers, the French securities authority, received a staggering 4,500-plus complaints about forex and binary options fraud in 2014. Those forex and binary options complaints constituted 37 percent of all complaints about securities fraud received by the authority in that year. The majority of the forex transactions that prompted those complaints originated in Israel, the article claims. What does Google have to do with this There is yet another piece of the binary options empire, and it relates to the way Israeli firms manage to reassure customers of their ostensible integrity, via Google. Lets say you are a potential binary options customer. A company has approached you about making a deposit, but you are not sure, so you decide to do your homework. You Google, Are binary options legitimate You will get a list of results, one or two of which may be fraud warnings from the US regulatory body, the CFTC. The first few pages of search results, however, are dominated by sites that purport to warn you away from scam binary options sites and steer you toward legitimate ones. Upon closer examination, however, many of these helpful sites themselves turn out to be affiliates of the binary options companies. Next, you might Google, Are binary options legal in the United States Once again, many of the top results turn out to be websites affiliated with the industry itself, rather than an objective source of information. Some of these sites offer misleadingstatements and half-truths like There are at this moment no laws both on the federal and state level that forbid US citizens from trading binary options online. US law banning binary options is directed at the companies that market them, not the customers who buy them, so there is some truth in that statement. However, the SEC and CFTC clearly warn investors that they may not have the full safeguards of the federal securities and commodities laws if they purchase unregistered binary options that are not subject to the oversight of U. S. regulators. Many countries, including Canada, publish updated lists of unregistered binary options companies that solicit customers in Canada in violation of the law. A recent Canadian list is here. The list features 37 companies. The Times of Israel went to the website of each company on this list. Some were no longer in operation. Others blocked users from Israel (presumably to avoid trouble with the Israel Securities Authority). One now hosts a porn site. Most were hard to pin down to a geographic location. However, based on first - and secondhand sources, The Times of Israel suspects that more than half of these companies, if not the overwhelming majority, operate from Israel. Investing with offshore companies operating outside of Canada can be risky and is a common red flag of investment fraud, the Canadian Securities Authority warns. Yet if you Google Canada, binary options, blacklist, once again, many of the top search results appear to be industry-affiliated sites, some of which recommend as legitimate the very same sites that are on the Canadian governments blacklist. Bryan Seely, a Seattle-based cybersecurity expert, tells The Times of Israel he is not surprised to hear of these Google search results, which, he explains, show Googles search engine being manipulated. To be continued in part 2.Forex News 18:05 Dot plot: what the Fed really think about the elections - Rabobank Analysts at Rabobank explained that the December 13-14 meeting of the FOMC will not only lead to a rate decision, but also to new rate projections. quotThe previous dot plot, published in September, implied two rate hikes in 2017. Since then, economic data have evolved in line with the Fedrsquos expectations, so that should not be a reason for a major shift in the dot plot. However, some in the FOMC may share the marketrsquos view that the fiscal policy initiatives by the new administration will give a big boost to the economy in 2017. On the other side of the spectrum, some may be concerned about the adverse impact of trade policies on the US economy. While Fed speakers have been careful in their comments on the election outcome, the dot plot will reveal what they really think about the economic consequences. quotWhile we may still see two hikes in the new plot, or more, we remain skeptical of such a scenario. First, the implementation lag of infrastructure spending can be considerable. Finding shovel ready projects can be a challenge. Second, the impact of infrastructure spending on GDP growth may also take time. Note that the 305bn highway bill of December 2015 has yet to have a positive impact on GDP growth. Second, the positive impact of the fiscal impulse may be mitigated by the negative fall-out from Trumprsquos trade policies. Therefore, we expect only one rate hike in 2017, letrsquos say December. If the fiscal policy impulse hits the economy sooner than we expect, and with more impact, the risks to our forecast lie to the upside. In contrast, if the fiscal impulse disappoints in terms of timing and size, or if trade conflicts bring substantial damage to the US economy, the risks lie to the downside. quot 18:00 GBP/USD better bid on a key week ahead, watching FOMC Currently, GBP/USD is trading at 1.2660, up 0.67 on the day, having posted a daily high at 1.2671 and low at 1.2567. GBP/USD has been holding the support line at 1.2550 after a sell-off from 1.2775 area and the peak of its Brexit/ flash-crash recovery. quotWhile GBP has trended higher from its early October low, cable is still 18 weaker than its pre-referendum levels and EUR/GBP is almost 10 higher, quot explained analysts at Rabobank. GBP/USD saw 1.50 just before the referendum results were announced in late June and the low for the year was 1.1840 on the back of the flash crash on October 7. Commerzbank39s EUR/GBP outlook quotWe maintain a negative bias and look for a retest of the recent low at 0.8304 and the 200 day ma at 0.8296.quot However, with the ECB39s dovish rhetoric last week compared to expectations for reflation in the US economy and political uncertainty in the EU, the pound can drift higher vrs the euro, certainly on a soft Brexit story, and it is questionable how much of a rate hike is already priced into the dollar that could be due a correction from its recent highs. The MPC will meet this week, along with the Fed and much will depend on their forward guidance, if any will be given at all if the BoE have no bias either way. In respect to the FOMC, the Fed funds futures continued to imply a 100 chance of a rate hike on 14 December, and two more rate hikes priced in for 2017. Spot is presently trading at 1.2661, and next resistance can be seen at 1.2671 (Daily High), 1.2685 (Daily Classic R3), 1.2720 (Weekly Classic R1), 1.2726 (Weekly High) and 1.2728 (Monthly High). Next support to the downside can be found at 1.2654 (Daily Classic R2), 1.2634 (Weekly Classic PP), 1.2627 (Hourly 100 SMA), 1.2622 (Yesterday39s High) and 1.2619 (Hourly 200 SMA). Commerzbank39s GBP/USD outlook quotWe look for the market to come under increasing downside pressure this week. We look for the market drop to the 1.2434 two month uptrend. This remains the break down point to the 1.2090/85 October 11 and 25 lows. Intraday rallies are likely to now struggle circa 1.2665. Initial support lies at 1.2302/1.2285.quot 17:59 USD/JPY may lose a little altitude near-term below 115.60 - Scotiabank USD/JPY technical picture looks bullish, according to Scotiabank analysts. They noted that a sustained break through the 116 area should see more follow through towards 119/120. ldquoUS/Japan longer-term rate spreads remain influential on USDJPY with US 10 year yields reaching 2.5 and rates likely to move higher still, the market has boosted USDJPY through 115 to the highest spot level since February. rdquo ldquoFridayrsquos IMM data confirmed a significant shift in speculative positioning and sentiment to JPY bearish. The net speculative short yen position revealed in the data was the largest in a year the Fed policy decision and the outlook for rates moving into 2017 will be key in sustaining bearish sentiment. rdquo ldquoUSDJPY short-term technicals: bullishmdashUSDJPY looks toppish on the short-term (hourly) chart and may lose a little altitude nearterm below 115.60 hourly trend support. We think the low 115 area should remain well-supported, however. A sustained break through the 116 area should see more follow through towards 119/120.rdquo 17:47 GBP/USD: Scope for additional near-term gains - BBH According to analysts from Brown Brother Harriman, the next target in the GBP/USD pair could be seen at 1.2775 and they warn that there may be scope to rise to 1.2830 before the end of the year. rdquo ldquoWhile the Federal Reserve meeting is the highlight this week, the UK has a number economic reports and the Bank of England39s Monetary Policy Committee meets. The UK reports inflation tomorrow, followed employment, and then retail sales a few hours before the central bank decision. rdquo ldquoSterling saw 1.50 just before the referendum results were announced in late June. It recorded a low near 1.1840 on the so-called flash crash on October 7. Since then it has gradually climbed higher. The best level since October 7 was recorded on December 6 at 1.2775.rdquo ldquoToday39s low near 1.2545 is the low for December (thus far). There appears to be scope for additional near-term gains. While the 1.2775 is the next target, there may be scope before the end of they year toward 1.2830.rdquo ldquo Even though the Fed will most likely hike rates, we are concerned that many will be disappointed if it does not upgrade its forecasts. We do not think this is particularly realistic, given the official comments and the lack of concrete details from the new Administration. rdquo 17:44 AUD/USD points to further rangebound UOB In opinion of FX Strategists at UOB Group, the near term outlook on AUD/USD signals further consolidation between 0.7350 and 0.7550. ldquoAUD registered a 0.7435/0.7496 range last Friday, rather close to our expected consolidation range of 0.7430/0.7500. From here, 0.7495/00 is acting as a strong resistance and as long as this level is not taken out, a move lower towards 0.7505/10 seems likely (even though as sustained move below this level is not expected)rdquo. ldquo AUD continues to trade mostly sideways and the neutral phase that started late last month is still intact. In other words, expect further range trading between 0.7350 and 0.7550 for nowrdquo. 17:35 US Dollar drops further, tests 101.00 The US Dollar Index ndash which tracks the buck vs. its main rivals ndash met extra selling pressure on Monday and is currently challenging the key 101.00 handle. US Dollar weaker ahead of FOMC The index is reverting two consecutive sessions with gains albeit it still manages to keep the trade above 101.00 the figure. USD is giving away part of the recent advance to the vicinity of 101.80, as market participants have already digested last Fridayrsquos auspicious results from US Consumer Sentiment and cautiousness has started to take over sentiment in light of the imminent FOMC meeting (Wednesday). Consensus among investors have practically priced in a 25 bp rate hike this week, although the Dollar will remain in centre stage as market participants will closely follow the Fedrsquos statement and Yellenrsquos press conference in order to look for any hint of the next steps by the Committee regarding monetary policy. In the meantime, the latest CFTC report showed the upbeat momentum in USD remains well underpinned on the positioning side, as speculative net longs have climbed at the highest level since August 2015 on the week to December 6. US Dollar relevant levels The index is losing 0.37 at 101.22 and a breakdown of 101.06 (20-day sma) would aim for 99.87 (low Dec.5) and finally 99.49 (low Dec.8). On the flip side, the initial hurdle is located at 101.80 (high Dec.5) ahead of 101.88 (high Nov.30) and finally 102.12 (2016 high Nov.24). 17:06 US stocks cautious ahead of the Fed, Dow hits fresh all-time high On the first trading day of the week, major US equity indices opened mixed, with the Dow Jones Industrial Average (DJIA) hitting a fresh all-time high, while both the SampP 500 and Nasdaq struggled to gain traction ahead of the Fed monetary policy decision. Although optimism, led by the weekend oil output deal between OPEC and non-OPEC members, triggered a strong rally in crude oil prices but has failed to lift appetite and provide fresh bullish impetus for other riskier-assets, including equities. At the time of writing DJIA gained over 30-points and rose to 19788, while the broader SampP 500 index was flat-lined around Friday39s closing level near 2,260 level. Meanwhile, tech-heavy Nasdaq Composite index underperformed the broader indices and lost around 15-point to 5,430. Investors now turn their focus to the much awaited two-day FOMC monetary policy meeting . starting Tuesday, and uncertainty around the central bank39s monetary policy stance in 2017 seems to be weighing on investor sentiment. The Fed is widely expected to lift the target range for its Federal-funds rate, for the first time since December 2016, to between 0.5 and 0.75. 16:36 EUR/USD extends strong recovery move beyond 1.0600 handle The EUR/USD pair held on to strong recovery gains above 1.0600 handle and has now reversed all of Friday39s losses recorded in the aftermath of dovish ECB taper. Currently trading around 1.0620-25 region, testing session peak, the spot gained traction on Monday as surging oil prices is expected to help lift the regions inflation and reflate the economy. Adding to this, a modest greenback retracement, as measured by the overall US Dollar Index . is also supportive of the pair39s strong recovery move at the start of a fresh trading week. With an empty US economic docket . market focus would remain on the upcoming FOMC monetary policy decision on Wednesday, where the central bank is widely expected to raise benchmark interest-rates by 25 bps. From technical perspective, the pair has managed to defend and rebound from 1.0530-25 historic support, thus, increasing the possibilities of additional recovery ahead of the Fed announcement on Wednesday. Valeria Bednarik, Chief Analyst at FXStreet, notes, quotin the 1 hour chart, the price is holding now above a modestly bullish 20 SMA, while technical indicators have lost upward strength within positive territory, indicating limited buying interest at current levels. In the 4 hours chart, technical indicators have resumed their declines after a modest upward correction within bearish territory, whilst the intraday advance stalled below the 1.0630 region, where the pair has its 20 and 100 SMAs, level that cap the upside since last Thursday. quot 16:35 GBP/USD accelerates the upside to 1.2670 The Sterling is now picking up further pace in detriment of the greenback, sending GBP/USD to daily tops in the 1.2665/70 band. GBP/USD focus on UK CPI, FOMC The pair has reverted the initial negative mood and is now trading in the upper end of todayrsquos range, gaining nearly a cent since recent lows and reverting at the same time a 4-session negative streak. The renewed offered bias in the buck is allowing the ongoing rebound in the risk-associated space, boosted already by the rally in crude oil prices following the non-OPEC deal clinched over the weekend. Looking ahead, UKrsquos inflation figures (Tuesday) area expected to show consumer prices rose at an annualized 1.1 during November, while Core prices are seen gaining 1.3 over the last twelve months. Across the pond, the most relevant event will be the FOMC meeting on Wednesday, with expectations clearly tilted towards a 25 bp rate hike by the Fed. On the positioning side, GBP speculative shorts have been trimmed to the lowest level since early August, while net shorts have retreated from record levels during the week ended on December 6 and according to the latest CFTC report. GBP/USD levels to consider As of writing the pair is gaining 0.27 at 1.2662 facing the next up barrier at 1.2706 (high Dec.8) followed by 1.2767 (100-day sma) and finally 1.2776 (high Dec.6). On the other hand, a break below 1.2545 (low Dec.9) would expose 1.2530 (20-day sma) and then 1.2462 (55-day sma). 16:33 United Kingdom CB Leading Economic Index remains unchanged at 0.1 in November 16:18 USD/JPY scope for a test of 116.50 UOB In view of Strategists at UOB Group, the pair could extend its upside to the mid-116.00s in the near term. ldquoThe ease of which the major 115.00 resistance was taken out last Friday was unexpected. While indicators are mostly overbought after the sharp rise, the current USD strength appears to have scope to extend further to 116.50 (low in August 2015) even though at this stage, a sustained move above this level seems unlikelyrdquo. ldquoThat said, the current positive undertone is intact unless there is a move back below 114.30rdquo. 16:13 USD/TRY firmer around 3.5000 The Turkish Lira is losing further ground today, sending USD/TRY to test the 3.50 area after climbing as high as the 3.55 region in early trade. USD/TRY off historical tops The pair is extending the rebound from last weekrsquos troughs in sub-3.3400 levels following a pick up in the demand for the greenback and extra downside pressure in TRY following the bomb blasts in Istanbul over the weekend, with 30 dead and more than 160 wounded. In the meantime, TRY seems poised for further pullbacks as geopolitical risks have gathered traction as of late and the Federal Reserve is expected to hike rates at its meeting on Wednesday. In the data space, Turkish GDP figures showed the economy has contracted at an annualized 1.8 during the third quarter, more than the 0.5 drop initially estimated and down from the previous 4.5 gain. Additionally, the Current Account deficit shrunk a tad to 1.67 billion in October. At the moment the pair is up 0.86 at 3.5069 and a break above 3.5494 (high Dec.12) would expose 3.5626 (high Dec.5) and finally 3.5860 (historical high Dec.2). On the other hand, the next support lines up at 3.4902 (low Dec.12) followed by 3.4346 (20-day sma) and then 3.3370 (low Dec.8). 16:09 USD/JPY trims strong gains to 10-month peak After surging through 116.00 handle to hit a 10-month high, the USD/JPY pair witnessed a profit taking slide and has now reversed majority of its daily gains. Currently trading around mid-115.00s, the prevalent cautious sentiment in equity market is seen extending some support to the Japanese Yen39s safe-haven appeal. Moreover, a broad based US Dollar retracement, as investors prepared for Wednesday39s much-awaited Fed monetary policy decision . also seems to be contributing to the pair39s profit taking slide from the highest level since Feb. 8. Investors, this week, will remain focused on the FOMC meeting starting Tuesday and firming expectations of interest rate-hike might continue to underpin the greenback. Adding to this, anticipated faster US economic growth and inflationary pressure, in wake of aggressive fiscal stimulus by Trump administration, has been fueling speculations tighter Fed monetary policy stance in 2017 and might now limit any immediate sharp downslide for the major. Valeria Bednarik, Chief Analyst at FXStreet, notes, quotIn the 4 hours chart, the RSI indicator pulls back from overbought territory, while the Momentum holds flat well into positive territory, supporting the case for a downward correction. This Monday39s low stands at 115.15, the immediate support and the level to break to confirm additional declines towards 114.00, the 23.6 retracement of the 2011/15 rally. quot 16:02 Mexico Industrial Output (YoY) down to -1.4 in October from previous -1.3 16:01 Intraday SMA cross seen on USD/HUF A new leg up in USD/HUF bolstered its 100 hourly SMA to cross above the 200 period one. While this intraday Golden Cross doesnt assure the recent correction is done and dusted, the low prices printed on hourly charts are at a converging distance to the SMA cross. This price level could be used as a technical hotspot by many USD/HUF traders. The risk scenario is set once a close beyond the 200 SMA is printed. 15:36 EUR/USD solid support comes at 1.0505 UOB FX Strategists at UOB Gorup noted the pair remains well supported around recent lows at 1.0505 for the time being. ldquoThe anticipated EUR weakness exceeded our expectation by moving below the 1.0560/65 target to reach 1.0528. With no signs of stabilization just yet, the decline appears to have room to extend lower to test the 1.0500/05 low seen on the day of Italian referendumrdquo. ldquoAs highlighted, the near-term pressure is tilted to the downside but any decline is expected to encounter solid support at the lsquoItalian referendumrsquo low of 1.0505. This level is followed closely by another major support which is the 2015 low of 1.0455/60rdquo. ldquoOverall, EUR is expected to stay under pressure in the coming days unless it can move and stay above 1.0670 (1.0630 is already a strong short-term resistance)rdquo. 15:26 Asia: November FX reserves not so bad after all - BNPP Mirza Baig, Head of FX amp IR Asia Strategy at BNP Paribas, notes that the Asian central banks have reported their FX reserves for November and most have updated their FX forward books for October. ldquoWhile Chinarsquos FX reserves declined slightly more than expected in November, most other countries reported much better figures. rdquo ldquoGiven that net foreign selling of local market assets was substantial, the smaller - than-expected decline in FX reserves suggests foreign investors are in no hurry to repatriate cash. Unlike previous episodes of market mayhem, the bid for USDs appears remarkably subdued. rdquo ldquoWe track reserve changes (adjusted for valuation effects) closely as they are a key indicator of balance of payments dynamics and central banksrsquo FX policies. rdquo ldquoThe standout theme is that reserve depletion was smaller than expected in most cases. Given the pressure on Asian currencies and the large redemptions reported by EM funds, we had expected a substantial drop in FX reserves. rdquo ldquo China: China reported a nominal decrease in reserves of USD 69bn in September, slightly more than the market expectation of a USD 60bn fall. After valuation adjustments, we estimate a decline of USD 25bn. While this confirms that downward pressure on the RMB increased last month, we believe the monthly reported reserves probably understate the authoritiesrsquo true market intervention. In general, due to the lack of transparency on lsquoproxyrsquo intervention and USDCNH FX swap transactions, we do not think that the monthly reserve data are a reliable or relevant indicator anymore. rdquo 15:22 USD/RUB sinks to 61.00, fresh 2016 lows The Russian currency is up more than 2 vs. its American peer at the beginning of the week, dragging USD/RUB to fresh lows in the 61.00 neighbourhood. USD/RUB drops on Brent gains RUB is trading in fresh 2016 tops vs. the greenback around the 61.00 handle, levels last seen in October 2015 in response to a strong rebound in crude oil prices following the non-OPEC deal over the weekend in Vienna. In fact, non-OPEC producers agreed to cut the oil output by nearly 560K bpd starting in January, adding to the already deal clinched by OPEC countries at the meeting in late November, all in order to stabilize the oil market and curb the persistent supply glut. Data wise today, Russian trade surplus came at RUB6.60 billion in October, missing estimates and down from Septemberrsquos RUB7.38 billion. The next big event for the pair will be the FOMC meeting on Wednesday, with consensus pointing to a 25 bp rate hike. USD/RUB levels to watch At the moment the pair is retreating 2.03 at 61.22 facing the next support at 60.97 (2016 low Dec.12) ahead of 60.84 (low Oct.9 2015) and then 58.57 (low Jul.29 2015). On the other hand, a break above 62.49 (high Dec.12) would expose 63.46 (55-day sma) and finally 63.99 (20-day sma). 15:16 USD/CAD off session lows, still well-offered near 1.3150 level After an initial slump to the vicinity of 1.3100 handle, the USD/CAD pair has managed to recovery around 30-pips from session low and is currently trading marginally below mid-1.3100s. Following an agreement between OPEC and non-OPEC over the weekend, to cut their cumulative oil production, surging crude oil prices lifted the commodity-lined currency - Lonnie, dragging the USD/CAD major to its lowest level since Oct. 20. As markets digested the initial reaction to oil production deal, a bullish consolidation in oil prices helped the pair to witness a minor pull-back from nearly two-month lows. Moreover, traders also seemed to position themselves cautiously and might have been inclined to take some profits off their bearish USD bets ahead of the upcoming FOMC decision on Wednesday, where the central bank is widely expected to raise interest rates by 25 bps. In absence of any major market moving releases, either from Canada or the US, the prevalent bullish sentiment surrounding oil prices might continue to lend support to the Canadian Dollar39s strong bid tone and might restrict any sharp recovery for the major. Technical levels to watch From current levels, weakness below 1.3110 level (session low) is likely to drag the pair towards testing the very important 200-day SMA support near 1.3075 region below which a fresh leg of weakness would open room for further near-term depreciating move for the pair. On the upside, sustained recovery momentum above 1.3150 immediate hurdle is likely to lift the pair towards 1.3175 ahead of 100-day SMA resistance near 1.3195-1.3200 region. 14:45 Gold struggling to register any meaningful recovery from multi-month lows Despite of a broad based greenback retracement, Gold maintained its offered tone for the third consecutive session and remained closer to over 10-month lows touched during early Asian session on Monday. Currently hovering around 1156 region, the precious metal failed to extract any support from weaker US Dollar . which tends to boost demand for dollar-denominated commodities - like gold. Moreover, cautious sentiment prevalent around the European equity markets has also failed to benefit the yellow metal39s safe-haven investment appeal. The metal39s inability to register any meaningful recovery, despite of some support from couple of intrinsic, clearly reveals investors39 reluctance to carry any bullish bets in anticipation of an interest rate hike at this week39s FOMC meeting . ending on Wednesday. With the near-term trajectory still dependent on the US Dollar, hints towards a faster pace of reversal of the Fed39s easy monetary policy would help the greenback to continue with its recent up-surge and eventually trigger a fresh leg of sell-off in gold. Technical levels to watch Recovery momentum above 1160 immediate resistance is likely to trigger a short-covering bounce towards 1169-70 resistance area ahead of 1175 strong hurdle. On the flip side, multi-month lows near 1151 level is likely to act as immediate support, which if broken is likely to continue dragging the metal further towards its next support near 1140 region. 14:43 GBP: Reiterating medium-term upside BNPP Sam Lynton-Brown, FX Strategist at BNP Paribas, notes that the Sterling has been the best performing currency since the start of November, supported by: the Bank of England moving from an easing to a neutral bias, the UK High Court ruling that parliament has to approve the invocation of Article 50 to leave the EU, and ndash linked to the previous point ndash the governmentrsquos EU negotiation stance seemingly becoming less geared towards a lsquohard Brexitrsquo. ldquoAnother supportive factor for the GBP is the apparent breakdown of the correlation between reserve depletion and GBP selling. Many market commentators suggest that EM reserve depletion requires the automatic selling of reserve currencies. In 2015, the periods of elevated EM reserve depletion corresponded with GBPUSD consistently and significantly undershooting its fair value implied by rates, equities and commodities. rdquo ldquoHowever, since the US election, despite expected EM reserve depletion, the relationship with GBPUSD has broken down. This suggests reserve managers do not want to significantly reduce further their GBP holdings, consistent with our structural fair-value model BNP Paribas FEER, highlighting that GBPUSD is extremely cheap from a long-term fair value perspective. rdquo 14:30 Risk-reward attractive for CAD shorts BNPP Daniel Katzive, Head of FX Strategy at BNP Paribas, favours positioning for USDCAD gains from current levels as a retreat in crude, widening rate differentials and a potential turn for the worse in the risk environment are all potential catalysts for a CAD retreat. ldquoWe recommend buying a 3-month 1.34/1.36 call spread. We offer the following arguments in favour of adding to short CAD exposure at this time: 1) Oil is at the top of its range . Crude prices have gained in the aftermath of the November 30 OPEC deal, with front-month WTI prices above USD 50/bbl. Our commodity strategists believe current levels are unlikely to be sustained as WTI levels above USD 50/bbl will invite North American producer hedging and production, which will threaten needed market rebalancing and inventory reduction. We continue to forecast a retreat towards USD 45/bbl in the weeks ahead, which would be consistent with a higher level of USDCAD. 2) Rate differentials . The Bank of Canada has signalled its policy outlook is set to diverge further from that of the Fed. Our economists expect an easing in January, but even steady Bank of Canada policy would allow front-end rate differentials to continue to move against the CAD. 3) Positioning . Our BNP Paribas positioning framework signals the market has turned long the CAD for the first time since Q2 2016. Long CAD positions could be vulnerable to a retreat in crude prices and/or a turn for the worse in the risk environment as markets shift to focus on US fiscal policy implementation risks and trade policy uncertainties. rdquo 14:23 USD to work its way back toward JPY120 - BBH Dollar is running higher against the yen and has risen in seven of the past nine weeks notes Research Team at BBH. ldquoIt began with an eight-day advance in late September and early October, well before the US election. After carving out a base in the summer around JPY100, the dollar has rallied strongly. Since the middle of September, the yen has fallen nearly 12 against the dollar. The greenback has retraced a little more than 60 of the decline since peaking in June 2015 near JPY126. In the coming months, we expect the dollar to works its way back toward JPY120.rdquo ldquoSince the middle of September foreign investors have returned to the Japanese stock market. In the last 10 weeks, foreign investors bought an average of JPY258 bln of Japanese equities per week. In these ten weeks, all bought one saw net foreign buying. The average over the previous 10 weeks was a net sale of JPY249 bln over which time foreigner were net buyers in two of the weeks. The Topix has rallied about 13 over the period. Note that the modest gain today put the Nikkei up YTD for first time. rdquo ldquoJapan reports the Tankan Survey this week. There is good reason to be optimistic of the Japanese economy in the near-term. Growth in this quarter is off to a better start than the previous quarter. There will be an increase of fiscal stimulus next year. Higher oil prices will aid efforts to arrest lingering deflation pressures. While the US President-elect appears to have ruled out TPP, much to Japan39s dismay, his more confrontational approach to China and quotAmerican Firstquot plays well for Abe, who continues to expand Japan39s military capacity. rdquo 14:20 USDJPY to rise to 128 by the end of 2017 and 135 by the end of 2018 - BNPP Steven Saywell, Global Head of FX Strategy at BNP Paribas, suggests that their year-end forecast for USDJPY stands at 128 ndash the highest amongst forecasting banks according to the latest Bloomberg consensus. ldquoWe are committed to this above-consensus forecast and think a long USDJPY position represents the top FX trade idea for 2017. We initiate a 1 Year USDJPY RKO: Strike 121.50 with KO 132.50 for a cost of 38bp (spot ref: 113.40).rdquo ldquoOur expectations for USDJPY to reach 128 is driven largely by developments in the US, particularly the anticipated rise in US yields as markets continue to price for increased Federal Reserve rate hikes. Our colleagues in rates strategy predict a further rise in US 2y sovereign bond yields in 2017 to 190bp from the current level of 110bp. We expect no significant response from Japanese monetary policy, which will likely continue to focus on maintaining 10y JGB yields at zero. In contrast, we think the ECB will start to reduce its purchases of bonds under the current quantitative easing (QE) programme during 2017 and will exit completely by H1 2018. The greatest central bank policy divergence will therefore be between the US and Japan, driving up USDJPY considerably. rdquo ldquoOur medium-term FX forecasting model, BNP Paribas CLEERtrade, signals that USDJPYrsquos current valuation of 123 will rise to 131 at end 2017 and further to 136 by end 2018. During H2 2016, USDJPY appeared undervalued relative to its CLEER valuation for the first time since September 2012. The primary driver of CLEERrsquos bullish USDJPY projection is the divergence in relative rates (2y swap rate differentials between the US and Japan). CLEER indicates that the interest rate differential in isolation would increase the fair value of USDJPY by 10 between December 2016 and December 2018. Expected CPI changes, particularly the increase in US inflation following President-elect Trumprsquos planned fiscal expansion, should mitigate the relative rates divergence somewhat. rdquo 14:15 EUR/USD firmer, sticks to gains around 1.0600 The resumption of the offered bias around the greenback has prompted EUR/USD to retake the 1.0600 barrier and beyond. EUR/USD cautious ahead of FOMC The pair has managed to regain some buying interest following the recent ECB-led drop to the 1.0530 region, although the upcoming FOMC meeting prompts cautiousness in light of the most likely rate hike on Wednesday. Market consensus has practically priced in a 25 bp rate hike in the Fed Funds, although the centre of attention will be on the potential future steps by the Fed regarding further tightening during the next year, all amidst the underlying constructive stance around the buck. From the positioning perspective, EUR speculative net shorts have been trimmed to the lowest level since mid-October during the week ended on December 6. EUR/USD levels to watch The pair is now up 0.39 at 1.0597 facing the next resistance at 1.0629 (20-day sma) followed by 1.0798 (high Dec.5) and finally 1.0873 (spike post-ECB Dec.8). On the flip side, a breakdown of 1.0515 (low Nov.24) would target 1.0503 (2016 low Dec.5) en route to 1.0457 (2015 low Mar.16). 14:14 Italy remains a source of tension - BBH Italy remains a source of tension, but its problems remain localized according to the Research Team at BBH. ldquoWe do not see the rejection of the referendum as part of the Brexit-US election axis, and the 40 that voted for the referendum is a sufficient block to elect the next Prime Minister. We would suggest the local elections earlier this year, in which the Five-Star Movement won in Rome and Turin, is a more revealing sign of its ascendancy. rdquo ldquoItaly39s foreign minister Gentiloni will replace Renzi as Prime Minister provided he can put together a government that can win a confidence vote. A broad coalition government needs to be in place by the middle of the week, to allow Gentiloni to represent Italy at the EU Summit that begins Thursday. Gentiloni is the fourth unelected Italian Prime Minister. For now, Italian asset are doing fine with Gentiloni forming a caretaker government. rdquo ldquoThere are three main tasks for the caretaker government: prepare for elections, make the necessary decisions to address the simmering banking crisis, and continue reconstruction of the areas devastated by the recent earthquakes. An election before the Dutch election in March seems optimistic, but still the table is set for quite a political spring in Europe (Holland, Italy and France, UK likely triggering Article 50, before German elections in the fall).rdquo ldquoThe Italian premium over Germany has been trending higher all year. It began below 100 bp and is now at 167 bp, having been a little above 185 bp in late November. Italy39s 10-year bond yield is up 45 bp this year. Spain39s is off 25 bp. However, Italy can still borrow money at negative interest rates going out two years. The current minus nine basis points compares with positive ten basis points in late November. The Italian bank stock index fell 2.25 before the weekend, but it still closed higher on the 12.75 on the week and 18 over the past two weeks. Perhaps, if necessary, the interregnum government can take the unpleasant step of seeking ESM support, which could otherwise tarnish Renzi39s comeback. rdquo ldquoRenzi (not Grillo, the head of the 5-Star Movement) is likely the odds-on favorite of the next election at this juncture. The Constitutional review of the new electoral law for the lower chamber after the former law was disallowed will take place in late January. If the new electoral law is rejected by the Court on grounds that giving a bonus to the largest party is not consistent with representative government, it would further bolster Renzi insofar as it favors coalition building, and this is a critical weakness for the Five-Star Movement. rdquo 14:13 GBP/USD extends recovery momentum further beyond 1.2600 handle After an initial dip to session low near 1.2565 region, the GBP/USD pair reversed sharply and jumped to a fresh session peak, snapping four days of losing streak. Currently trading around 1.2640 region, the pair was seen building on to its momentum back above 1.2600 handle amid broad based US Dollar retracement. In absence of any fresh economic releases, the current pull-back from session low could be attributed to short-covering once the pair sustained its recovery back above 1.2600 handle. Moreover, investors seemed to readjust their positions ahead of this week39s central bank monetary policy decisions, FOMC on Wednesday and BOE on Thursday, which would determine the pair39s next leg of directional move. In the meantime, traders will look forward to Tuesday39s Chinese macro data and UK economic docket featuring the release of inflation data for the month of November for short-term trading opportunities. Valeria Bednarik, Chief Analyst at FXStreet, notes, quotTechnically, the pair is stuck around the 50 retracement of its latest daily advance at 1.2575, and in the 4 hours chart, unable to advance beyond a bearish 20 SMA, whilst technical indicator have turned modestly lower within negative territory, supporting some additional slides for this Monday, particularly on a break below 1.2550, the immediate short term support. Below it, 1.2500 is the next bearish target, en route to 1.2470, a daily ascendant trend line coming from December low. quot quotThe upside remains capped by selling interest in the 1.2610/20 region, with gains beyond 1.2630, the 38.2 retracement of the mentioned advance required to revert the intraday negative tone and see the pair advancing up to 1.2650/70.quot 14:09 Fed: 25bp rate hike is fully priced - BNPP Focus now shifts to the FOMC meeting on Wednesday (14 December) and a 25bp rate hike is fully priced by markets, and markets are also close to fully pricing two hikes next year explains Research Team at BNP Paribas. ldquoWith the Fed likely to be cautious about over-committing to further tightening in its communication, we see little scope for this weekrsquos meeting to boost the USD further in the short term. However, anticipation of further tightening should guide US rates and the USD higher as we move through 2017.rdquo ldquoWe think USDJPY will continue to outperform, as monetary policy divergence between the US and Japan will be particularly strong if the Federal Reserve hikes rates and the Bank of Japan maintains its yield curve targeting policy as we expect. We target USDJPY to reach 128 by the end of 2017.rdquo 14:01 Oil: Real challenge is the implementation of the oil agreement - BBH Research Team at BBH suggests that although an agreement within OPEC and also between OPEC and non-OPEC producers was struck, the real challenge is the enforcement, as no such mechanism exists. ldquoWhile everyone is well aware of that, our point is that sequence is important and it is too early to worry about violations. rdquo ldquoLike many, we seem to have underestimated the Saudi39s resolve. Shortly after securing an agreement from non-OPEC members to cut output, Saudi Arabia indicated it was prepared to cut output more than agreed last week. It suggested it would cut output below the psychologically important 10 mln bpd threshold. Not only is OPEC not dead, but Saudi Arabia39s leadership is significant. Although non-OPEC members will cut 558k barrels, less than the 600k asked for, it is still the most ever. It is also impressive, that despite Kazakhstanrsquos new large oil field coming on line, it also participated by a small cut (20k bpd).rdquo ldquoThe optics are good and this will likely lift oil prices further. Over the coming months, we suspect there is scope for oil to rise to 57-65 a barrel basis on the January futures contract. That said, the closer one examines the details, the less impressive it looks. Consider Russia will account for 300k bpd reduction, more than half of the non-OPEC contribution. Russia had boosted its output in recent months as an agreement was distinct, even if unlikely, possibility. There was a post-Soviet Union record 11.247 mln bpd in October. It says that it will cut 200k barrels by March and another 100k bpd in six months. rdquo ldquoSaudi Arabia39s agreement with OPEC should bring its output back to its average earlier this year. Several other countries, including Mexico, are simply formalizing a natural decline. Important non-OPEC producers, including those in the US, Canada, and Brazil will be the beneficiaries, as free-riders. US capacity, especially the shale component, is very flexible and there are reports of that many wells have been drilled, but the wells have been capped. Consider it a free natural underground storage facility. rdquo ldquoAlso, recall that important technological advances have been made over the past two and half years (yes, Professor Gordon, the innovations are not as significant as the internal combustion engine) that lowers the cost of getting that marginal barrel of shale. Assuming that some US producers are skeptical of the implementation of the oil agreement, there may be incentives to boost output quickly to take maximum advantage of what could be a small window of opportunity. rdquo 13:56 US: The danger of the consensus view Danske Bank Thomas Harr, Global Head of FICC Research at Danske Bank, notes that since the Donald Trump US presidential election victory, a strong consensus has formed that the USD will strengthen substantially and that US rates will head a lot higher. ldquoThe story goes that Trump-led fiscal stimulus will drive a higher US neutral rate and a stronger USD ndash much like during the first Ronald Reagan administration in 1981-84.rdquo ldquoNear term, we agree ndash rising US growth expectations will drive a stronger USD and higher global rates. The US economy was already gaining speed before the Trump victory. Over the past few weeks, euro area October retail sales, Germany factory orders and China PMI Manufacturing have all surprised substantially on the upside, suggesting that the US-led recovery is spreading to Europe. However, for us, the view of a stronger USD is a short-term one and there is a high risk that the push higher in global yields will lose steam. rdquo ldquoFor a start, there is a lot of uncertainty about the type of US fiscal stimulus and how quickly it will filter through to the economy. For example, the infrastructure spending that Trump has been advocating will not be financed by the federal government but rather by a lsquodeficit-neutral system of infrastructure creditsrsquo. There is no guarantee that Congress will agree to the tax credits or that business will respond as intended. In addition, Trumprsquos tax cuts will tend to benefit the lsquobetter offrsquo, who have a lower propensity to consume and hence a lower fiscal multiplier. Finally, the output gap in the US is largely closed, which suggests that fiscal stimulus will be more inflationary than growth boosting and there may be a negative growth impact beyond a year. rdquo 13:48 Fed: Key to investors reaction will be a function of the statement and forecasts - BBH Research Team at BBH suggests that provided that the Federal Reserve delivers the widely tipped and expected 25 bp hike in the Fed funds target range, the key to investors39 reaction will be a function of the FOMC statement and forecasts. ldquoA failure of the Federal Reserve to raise interest rates would be a significant shock and likely spur a dollar sell-off, a Treasury rally, and probably an equity market sell-off. A probabilidade deste cenário é tão baixa que não vale muito tempo discutindo. Similarly, a 50 bp move also is highly unlikely. Isso iria contra tudo o que o Fed tem dito sobre movimentos graduais. It would be an admission of getting behind the curve, and there is no evidence that this is their assessment. rdquo ldquoThere seems to be a broad sense that near midyear, there will likely be some tax cuts and spending increases alongside a tougher, perhaps more mercantilist trade policy. The details are vague, and how this sits with the fiscally conservative wing of the Republican Party is not clear. While the intentions and signals of the President-elect have spurred a sizable reaction in the capital markets, more concrete details are needed to begin contemplating the impact on monetary policy. rdquo ldquoTherefore (and this is where some investors may be disappointed), the FOMC39s economic assessment and most importantly, their forecasts, are unlikely to change very much. Of course, the part of the statement that updates the economic assessment may be upgraded a notch. The headwinds that held the economy below trend appear to be transitory as the Fed had anticipated. Fourth quarter growth looks to be around 2.5. Consumption may be a little less robust and trade is looking like a drag. rdquo ldquoAll else being equal, the appreciation of the dollar and rise in yields would likely have a dampening impact on growth and inflation forecasts. This may be blunted by the further decline in the unemployment and underemployment rates and the wealth effect. And given the uncertainties over the new Administration, most Fed officials are likely to be reluctant to change their forecasts much now, when in three months, visibility will be better. rdquo ldquoSpecifically, we expect the median dot show expectations for two hikes next year. While this is twice as fast as the pace in 2015 and 2016, it fits any definition of prudent and cautious. A recent Wall Street Journal survey found that among economists three rate hikes are thought likely next year. rdquo ldquoIn her press conference, Yellen will likely deflect any discussion of the new Administration39s policies. However, she can be counted to offer a vigorous defense of the Fed39s independence against encroachments. Given two current vacancies, the expiration of several governor terms in 2018, the new Administration will have the opportunity to change the Federal Reserve significantly without going through the politically and economically sensitive course of direct confrontation. rdquo 13:38 EUR/JPY reverses ECB-led slide, fast approaching 123.00 handle The EUR/JPY cross maintained strong bid tone for the second consecutive session and has now moved within striking distance of 123.00 handle. Currently trading around 122.90 region, the cross is benefiting from a sharp recovery staged by the shared currency as investors digested last week39s dovish ECB tapering. Adding to this, the prevalent risk-on mood, in wake of weekend oil output deal between OPEC amp non-OPEC member, is further weighing on the Japanese Yen39s safe-haven demand and providing an additional boost to the pair39s strong up-move on the first trading day of the week. Looking at the broader picture, last week39s price-action could be categorized as consolidation phase following Monday39s sharp recovery from the very important 200-day SMA touched in the aftermath of a 39NO39 vote to Italian referendum. Hence, sustained momentum back 123.00 handle would reaffirm continuation of the pair39s upward trajectory in the near-term. Technical levels to watch Momentum above 123.00 handle now seems to get extended beyond last week39s multi-month peak resistance near 123.35 region, towards its next hurdle near 123.75 region. On the downside, 122.00 round figure mark now becomes immediate strong support to defend, which if broken is likely to accelerate the slide towards 121.25 intermediate support before the cross eventually aims towards testing its next major support near 120.15-10 region. 13:31 WTI off highs, back below 54.00 After hitting fresh peaks in levels last seen in July 2015 in the mid-54.00s, the barrel of West Texas Intermediate has now receded to the 53.80 region, still up by more than 4. WTI boosted by non-OPEC deal The recent upside momentum in crude oil prices has been boosted further following the deal between 11 non-OPEC producers to reduce the output by nearly 560K bpd. The deal adds to the previous agreement clinched between OPEC countries on November 30, by which producers will cut the output by 1.2 mbpd to 32.5 mbpd starting in January, all in order to stabilize the oil market and spur prices from previous depressed levels. Later in the week, the usual reports on inventories by the API (Tuesday) and the EIA (Wednesday) are due, although the focus of attention will remain on the buck and the FOMC meeting on Wednesday, with consensus expecting the Fed to hike the Fed Funds rates by 25 bp. On the positioning front, WTI speculative net longs have climbed to the highest level since October 25 during the week ended on December 6 and according to the latest CFTC report. WTI levels to consider At the moment the barrel of WTI is gaining 4.21 at 53.67 and a breakout of 54.50 (2016 high Dec.12) would aim for 62.58 (high May 6 2015). On the other hand, the immediate support lines up at 52.59 (low Dec.12) followed by 51.66 (high Dec.9) and finally 49.61 (low Dec.8). 13:09 Bonds: Onward and upward BNPP Laurence Mutkin, Global Head of G10 Rates Strategy at BNP Paribas, lists down the two reasons that global bond yields have continued the upward march they began in the summer, notwithstanding risk events which have surprised markets (most recently the Italian referendum and the ECBrsquos new QE recipe). ldquoFirst, inflation breakevens remain well below their historic averages even though ldquothe risk of deflation has largely disappearedrdquo, as ECB President Draghi put it at the December ECB press conference. rdquo ldquoSecond, term premium remains extremely low, even at the front end of yield curves: we expect that after Decemberrsquos FOMC, US term premium will continue to rise to reflect the prospect for higher growth, inflation and bond supply over the next couple of years. rdquo ldquoAs far as the Eurozone is concerned, our economistsrsquo call regarding a change in PSPP parameters and extension proved right. On the expected three implications of todayrsquos ECB announcement: i. e. steeper curves, tighter long-dated ASW and higher long term rates, the first two have occurred already. For the third one, we believe that the relative stability of Bund yields will prove temporary as real yields will have to adjust higher. rdquo ldquoHence ndash notwithstanding the pace of the sell-off ndash we maintain our recommendations to be short duration in the US and to have curve steepeners in the euro area, Japan, the UK and Australia. At present market levels, risks around the outlook for interest rates and inflation remain asymmetrically tilted to the upside. rdquo 13:03 Markets: Play certainties, manage uncertainties - Natixis Research Team at Natixis notes that the US elections and the quotnoquot at the Italian referendum did not trigger the expected shocks (with the noteworthy exception of EM and gold), as the markets have visibly chosen to focus only on the good news pending future politico-economic developments. ldquoIt is, ultimately, fundamental trends (inflation, increase in interest rates) that to a large extent have driven investors. This is likely to remain the case over the coming weeks, but we should now expect a higher risk regime. Our risk perception index has entered the intermediate regime after a little more than three months in the low regime. rdquo ldquoWhile we remain positive on equities and on corporate High Yield, but we downgrade EM local debt. As for intra-class arbitrages, we have turned positive on Japanese equities and maintained our views on the other regions. The hierarchy of views on sovereign has remained unchanged, with underweighting of USD and GBP. We have, lastly, turned tactically neutral on industrial and precious metals because of the ferocity of their recent move. rdquo 13:03 AUD/JPY overextended but making higher highs AUD/JPY has been building up a bearish case of late, and traders may be looking to take some profit off the table. On a 4-hour chart, the 50-period is well distanced above the 200-period SMA and the Relative Strength Index has been, on average, above the 50 mark over the last three weeks. The recent attack on highs, coupled with the acceleration of the rally has caused this indicator to enter the overbought zone above 75. This is a less frequent event in this time frame and is often associated with 5th waves. AUD/JPY spot would have to gravitate towards the 50 SMA at a minimum to alleviate immediate upside pressures. 13:02 Upside vulnerability in USD/RUB From an hourly perspective, the USD/RUB has reached its lowest momentum reading of the last 20 days of trading. Moreover, the recent plummeting USD/RUB price action has been highlighted by an above-average reading in the MACD histogram. While these momentum extremes could migrate to higher time frames, the latest hourly MACD print shows dissipation of speed, thus communicating risks of a immediate upside vulnerability. 13:01 European stocks turn negative, Italys banking woes weigh The European stocks opened Monday on a mixed note, with the energy and resource stocks lifted amid persistent rally in oil prices, in wake of the global oil output cut deal reached during the weekend. However, the sentiment quickly soured as the uncertainty around the rescue plan for worldrsquos oldest bank, Monte dei Paschi, weighed heavily on the investorsrsquo sentiment. On Friday, the ECB rejected bailout extension for Paschi, after the bank failed the Europe-wide stress tests over the summer. Moreover, the retreat in the European equities from eleven-months peaks can be also attributed to increased cautiousness in the markets, as focus turns towards the FOMC meeting starting tomorrow, with the final verdict on the US interest rates due out on Wednesday. According to the CME FedWatch tool, markets are currently pricing in a 94.9 chance of a rate hike. Meanwhile, Germany39s DAX 30 index drops -0.26 to 11,175 levels, while the UK39s FTSE 100 index trades -0.25 lower at 6,940. Among the other indices, the French CAC 40 index trades muted around 4,765 while the pan-European Euro Stoxx 50 index trades modestly flat at 3,200 points. 12:58 ECB wasted an opportunity to prepare the market for the inevitable - Commerzbank In view of the Christoph Rieger, Head of Rates amp Credit Research at Commerzbank, the ECB wasted an opportunity in its latest meet to prepare the market for the inevitable. ldquoAs the market ought to realise that important legal constraints were indeed strengthened and look set to bite in early 2018, peripherals are exposed with Portugal first in line. Moreover, we argue that the package is a curve steepener and swap spread widener with the Greek ESM deal having potential to add to the ultra-long steepening. rdquo ldquoDraghi has bought time with his latest set of measures, but the new technical euroQE framework cannot hide the fact that smooth implementation will remain a key issue. Steady aggregate QE volumes mask the major shifts and already rising tensions beneath the surface as shortfalls in smaller countries including Portugal continue to deepen. Although the seasonal slow-down into year-end will provide relief, these frictions will extend with latest technical adjustments leaving the underlying drivers untouched. rdquo 12:52 ECB: A long, slow, disguised and clever taper Deutsche Bank Mario Draghi was at pains to stress that the slowing in the pace of QE to EUR60bn per month this was not the announcement of tapering as noted by the Research Team at Deutsche Bank. ldquoDraghi emphasized the longer-than-consensus 9-month extension of the QE programme and the commitment to more if necessary. Preserving the extraordinary degree of policy accommodative and lengthening the period of the ECBrsquos presence in the market was the overarching narrative the ECB wants to be taken from the announcements. rdquo ldquoOur interpretation is that this is a long, slow, disguised and clever taper. There has been an underlying improvement in the macro picture and the size of QE has been adjusted because the deflation risks foreseen in March have subsided. But the recovery remains uncertain and the ECB needs ensure a taper tantrum does not stub it out. Hence the longer QE and asymmetric commitment to doing more if necessary is valuable insurance. rdquo ldquoThe commitment to doing more is valuable insurance against a deterioration in financial conditions should, for example, this materialize in response to political events. Without the deceleration in purchases, Draghi might not have had the support to make this backstop commitment so clear. rdquo ldquoAssuming downside risks, political or otherwise, do not materialise, in September 2017 the ECB will face its next ldquoextend or taperrdquo decision. On the basis of the latest staff core inflation forecasts, our three core inflation rules to justify tapering will be satisfied at that point in time. Assuming the ECBrsquos above-consensus view on growth holds, the decision next September will be to either taper or make another step-wise adjustment to QE. The difference is just semantics. A long, slow tapering has begun. rdquo ldquoWe are more cautious on growth in 2017. Nevertheless, as the political calendar thins in H2rsquo17, the outlook for growth into 2018 ought to be rising. A further reduction in QE ndash or tapering ndash is probable around end-2017.rdquo 12:48 EUR: Hawkish message contained in the ECBs policy announcement - Rabobank Jane Foley, Research Analyst at Rabobank, suggests that Draghirsquos dovish tone and extension of the ECBrsquos bond buying programme until the end of next year managed to counter much of the disappointment that the ECB will from March reduce the amount of the monthly bond purchases, Rabobank would still argue that there is a hawkish message contained in the ECBrsquos policy announcement. ldquoIf the ECB had continued to buy assets at a pace of EUR80 bln until next September, any reduction in the pace would have been postponed until at least October. As it stands the reduction in the pace of asset purchases will commence next April. rdquo ldquoIrrespective of the debate about whether or not the ECB has tapered, Draghi was ultimately successful in making sure that the market has been made aware that the ECB will be heavily involved in asset purchases at least to the end of last year. Interestingly the extension of policy until December means that the ECB may not need to make another meaningful policy decision until after the German election next autumn. This provides a signal to the market that there should be plentiful cheap money to soften the impact of political uncertainty throughout next yearrsquos heavy election schedule. Political events threaten to increase market volatility next year, but ECB activity should provide some comfort. rdquo ldquoAs the dust settle over the debate about what constitutes a tapering, attention is set to turn its attention towards this weekrsquos Fed meeting. Futures suggest that the market is 100 confident of a Fed move. So, with a 25bps rate hike priced in, the market is likely to take its direction from the guidance offered by Fed Chair Yellen rather than from the policy announcement. On the back of the Trump Presidential election victory, hopes for reflation in the US have seen a significant boost. However, we would expect Yellen to be anxious to avoid a repeat of the H2 2014 scenario when heightened expectations of Fed rate hikes in 2015 led to a significant surge in the value of the USD - which ultimately reduced the need for policy tightening. Another factor which could restrain Yellenrsquos optimism is the confined nature of US wage inflation. rdquo ldquoLast release of US November Labour data produced a disappointing -0.1 m/m outcome for hourly earnings. Meanwhile, hours worked have not made much progress since 2013 and real household income growth has been soft for decades for all but the highest paid. This backdrop suggests that demand growth is still likely to be confined. It is our forecast that once again the Fed may only hike rates once in 2017. This could disappoint current market expectations and led to an unwinding of some of the recently created USD long positions. On the assumption that populist parties do not prevail in next springrsquos Dutch and French election, we are forecasting EUR/USD at 1.10 on a 12 mth view. rdquo 12:47 EUR/NOK room for further upside, focus on Norges Bank Danske Bank According to Analyst at Danske Bank Mathias Mogensen, the cross could attempt a squeeze higher in the near term. ldquoIn the Scandi FX sphere, the main focus this week will be the Norges Bank (NB) meeting on Thursday, where we expect NB to lower its rate path for 2017 by 10-15bp and thereby imply almost a 100 probability of a rate cut next yearrdquo. ldquoWe do not expect NB to cut further and we think that a dovish rate path along with the usual worsening of the liquidity situation going into end year could lead to some temporary upside support in EUR/NOK ndash especially after the past couple of daysrsquo decline on the back of the OPEC dealrdquo. 12:41 USD/JPY retreats from highs, back to 115.80 The greenback remains on a firm footing vs. the Japanese currency on Monday, with USD/JPY briefly testing fresh tops above 116.00 the figure. USD/JPY in 10-month peaks The pair is extending its rally for the sixth week in a row today, piercing the 116.00 handle for the first time since January although slipping back towards the 115.80 area soon afterwards. Spot keeps it upside unabated for the time being, as the solid performance from yields in the US money markets stay as the almost exclusive driver for the underlying bullish sentiment. Furthermore, the rally in crude oil prices has been boosted further after non-OPEC producers have agreed on Saturday in Vienna to cut the oil output, adding to the previous OPEC deal. The recent deal fuelled the risk-on trade, adding further selling pressure to the safe have JPY. In the data space, JPY speculative net shorts have climbed further during the week ended on December 6, reaching the highest level since early-August 2015 according to the latest CFTC report. USD/JPY levels to consider As of writing the pair is advancing 0.47 at 115.91 facing the next resistance at 116.12 (high Dec.12) ahead of 116.86 (78.6 Fibo of the 2016 drop) and finally 117.53 (high Feb.8). On the other hand, a breach of 112.99 (620-day sma) would aim for 112.84 (low Dec.5) and then 111.32 (low Nov.28). 12:27 BBG Survey: BOEs next rate move may be up as inflation tolerance tested Bloomberg conducted a survey on the outlook for the BOErsquos monetary policy program heading into 2017, with most economists see rate hike as the next move. Key findings from the Bloomberg survey: All the economists surveyed see rates staying on hold at 0.25 percent at this weekrsquos meeting, and the asset-purchase target at 435 billion pounds (547 billion) of government securities plus 10 billion pounds of corporate debt. More than 60 of economists see rate hike as next move While the next move may be tightening, it may not happen for some time. 41 of respondents see a rate rise by November, up from 21 three months earlier. The median forecast in a separate poll is for no change in rates until at least early 2019. Inflation probably accelerated to 1.1 percent in November, according to a separate survey. 12:20 Oil: More bullish price developments - MUFG Lee Hardman, Currency Analyst at MUFG, notes that the oil related currencies have been supported in the Asian trading session by a further jump in the price of oil which has lifted Brent to an intra-day high of USD57.89 per barrel. ldquoThe new cycle high for the price of oil has been triggered by further bullish developments over the weekend. Non-OPEC members reached an agreement to cut oil production by 558k barrels per day starting from January. It follows on from the recent agreement by OPEC members to cut production by 1.2 million barrels per day. It is the first joint pact to cut production between OPEC and non-OPEC members in fifteen years. The non-OPEC agreement includes pledges from Russia to cut production by 300k barrels per day, Mexico by 100k barrels per day, Azerbaijan by 35k barrels per day, and Kazakhstan by 20k barrels per day. rdquo ldquoAccording to reports, the joint OPEC and non-OPEC agreement covers around 60 of current oil production but excludes major producers including the US, China, Canada, Norway and Brazil. The price of oil has increased by around a fifth since the production cut agreements have been announced highlighting that the market is optimistic that it will help to rebalance demand and supply in the oil market more quickly. rdquo ldquoThe rebound in the price of oil has also been reinforced by comments over the weekend from Saudi Energy Minister Khalid Al-Falih who stated that Saudi Arabia will cut ldquocut substantially to belowrdquo their target agreed last month with other OPEC members. As part of the OPECrsquos agreement to cut production to 32.5 million barrels per day, Saudi Arabia has agreed to cut production to below 10 million barrels per day. The comments are an attempt to reinforce market confidence in the agreement given lingering concerns that the deals will not be implemented fully. Upside potential for the price of oil is also being dampened by expectations that supply from shale oil producers will increase in response to higher prices. rdquo ldquoOverall, the developments over the weekend support our outlook for a further gradual rebound for oil-related currencies in the year ahead. The higher price of oil is reinforcing Trump reflation trades. The yield on the 10-year US Treasury bond is now testing key resistance at 2.5 which if broken should result in a stronger US dollar especially against the yen. rdquo 12:12 EUR/USD recovers further to test 1.0600 amid negative equities The EUR/USD regains poise and now extends the upside in a bid to reclaim 1.06 handle, in wake of broad based US dollar correction and poor sentiment around the European stocks. EUR/USD: Will its sustain the recovery Currently, EUR/USD jumps 0.37 to trade near fresh daily highs of 1.0597, now looking to regain 5-DMA barrier located at 1.0614. The main currency pair is seen on a steady recovery path so far this session, with the EUR bulls gaining further momentum post-European open, after uncertainty over the Italian banking sector rescue plan crept into markets and weighed negatively on the European stocks, triggering a fresh risk-off wave and boosting the funding currency status of the EUR. Moreover, extension of the downside correction in the US dollar against its main peers, after last weekrsquos rally on an imminent Fed rate hike this month, also added to the renewed uptick in EUR/USD. Attention now turns towards tomorrowrsquos German ZEW sentiment and Wednesdayrsquos US retail sales and PPI data before a typical calm set into the market before the Fed decision. EUR/USD Technical Levels In terms of technicals, the pair finds the immediate resistance 1.0614 (5-DMA). A break beyond the last, doors will open for a test of 1.0623 (20-DMA) and from there to 1.0646 (10-DMA). On the flip side, the immediate support is placed at 1.0526 (5-day low) below which 1.0503 (multi-month low) and 1.0456 (March 2015 low) could be tested. 11:57 NZD/USD clings to gains beyond 50-DMA Having posted a session low at 0.7115, the NZD/USD pair managed to recover early losses and is now seen building on to its momentum back above 50-day SMA. Currently trading at fresh session peak near 0.7160 region, the pair gained fresh traction after Bill English was sworn in as New-Zealand39s new Prime Minister, which receded fears of political uncertainty following last week39s surprise exit of his predecessor John Key. Moreover, weekend oil output deal between OPEC and non-OPEC producers, provided an additional boost to investor sentiment and extended further support to the bid tone surrounding higher-yielding currencies - like the Kiwi. The pair is also benefiting from an upbeat report on the NZ government by the US-based ratings agency, Moodyrsquos Investors Service that showed government forecasts average annual GDP growth of 3.5 over 2017 and 2018 and lifted the pair back above 50-day SMA. This week39s major focus, however, would remain on two-day Fed monetary policy meeting starting Tuesday and the outcome would help investors to determine the pair39s near-term trajectory. The Fed is scheduled to announce its monetary policy decision later during NY session on Wednesday. In the meantime, Tuesday39s Chinese economic data might provide some trading opportunities for short-term traders. Technical levels to watch From current levels, 0.7175 level is likely to act as immediate resistance above which the pair seems to retake 0.7200 handle (100-day SMA) and head towards testing its next resistance near 0.7228-30 region (Nov. 11 high). On the downside, weakness back below 50-day SMA support near 0.7145 region now seems to drag the pair back towards session low support near 0.7115 before eventually dropping to 0.7100 handle. 11:54 GBP/USD offered above 1.26, hits fresh lows near 1.2570 The GBP/USD pair ran through fresh offers above 1.26 handle over the last hours, now dropping to fresh session lows of 1.2571, down -0.14 on the day. The cable stalled its recovery mode and fell back in negative territory, after a renewed bout of risk-aversion gripped the European markets and dampened the sentiment around the higher-yielding currencies such as the GBP. The major witnessed fresh buying interest earlier today and rallied as high as 1.2612, mainly driven by cross-driven strength, helped by fresh selling in EUR/GBP and at the same time GBP/JPY demand. Amid a data-empty fundamental calendar for today, focus shifts towards Tuesdayrsquos China data dump and UK CPI report for further momentum on the major. In terms of technical levels, upside barriers are lined up at 1.2635 (10-DMA), 1.2650 (psychological levels) and 1.2704 (100-DMA). While supports are seen at 1.2548/45/42 (Dec 9 amp 8 low/ 20-DMA) and 1.2498 (Dec low) and below that at 1.2421 (50-DMA). 11:42 ECBs Nowotny: Bond yield steepening is not bad - BBG Speaking at an event in Vienna on Monday, ECB governing council member Ewald Nowotny commented on the Italian banking crisis and rising bond yields. Key Headlines via Bloomberg: Bond yield steepening is not bad Italy has structural, not only banking, problems 11:18 USD/CHF turns lower, upside remains capped at 1.0200 level Having once again failing to decisively move above 1.0200 handle, the USD/CHF pair ran through fresh offers on Monday and has drifted into negative territory. Currently trading around 1.0165-60 region, testing session lows, the pair witnessed a profit taking slide on Monday after struggling to build on last week39s strong up-move from 3-week low to the highest level since early Feb. Ahead of the much-awaited FOMC meeting on Wednesday, investors seem to position themselves cautiously and prefer to take some profits off the table. With a 25 bps interest-rate hike fully priced-in, investors will now look for clues over the possibilities and timing of next Fed rate-hike action in 2017 from the updated interest-rate and economic projections (dot-plots), accompanying the monetary policy statement. Technical levels to watch Weakness below 1.0150 level is likely to accelerate the slide back towards 1.0100 round figure mark with some intermediate support near 1.0130 level. Alternatively, on a sustained move above 1.0175 immediate resistance the pair is likely to make a fresh attempt towards conquering 1.0200 handle above which the pair seems to aim towards yearly highs resistance near 1.0255-60 region. 11:15 EUR/SEK aims higher in the near term Danske Bank In view of Mathias Mogensen, Analyst at Danske Bank, the Swedish Krona could come under further pressure in light of the release of key data and the Riksbank. ldquoIn Sweden, the inflation figures on Tuesday will be monitored closely as the outcome is likely to be pivotal for the Riksbankrsquos monetary policy announcement on 21 December. Our estimates for November CPIF and CPIF excluding energy are 1.56 y/y and 1.21 y/y, respectively. This is 0.15pp and 0.17pp below the Riksbankrsquos corresponding respective estimates and implies that the difference compared with October remainsrdquo. ldquoLower-than-expected inflation is the most important reason why we still expect the Riksbank to extend its QE purchases by another SEK30bn and also expect it to deliver a 10bp rate cut in December. While the QE extension is fully expected in the market, we note that a rate cut is not priced at allrdquo. ldquoAccording to our short term financial models, a 10bp widening of the two-year SEK-EUR interest rate swap spread would ndash all else being equal ndash lead to a 20 figure increase in EUR/SEK . Hence, we see a large digital risk around the Riksbank meeting in the sense that EUR/SEK could spike higher temporarily in the event of a rate cut, while no cut would be fairly neutral for EUR/SEKrdquo. 11:08 Fed: Odds of a 25bp rate hike this week are 92 - SocGen Kit Juckes, Research Analyst at Societe Generale, notes that the Bloomberg puts the odds of a 25bp Fed rate hike this week at 92 and the odds of a 50bp hike at 8. ldquoItrsquos fair to say that a hike is fully priced-in and if the old lsquobuy the rumour, sell the factrsquo adage has any value, maybe wersquore supposed to look for some correction in the dollar rally and the bond sell-off after the event. rdquo 11:07 German Economy Ministry: Economy to pick up in Q4 after slowdown in Q3 - RTRS Reuters reported headlines from the German Economy Ministry, sounding upbeat on the German economic outlook. Global economic environment remains difficult but seems to be gradually brightening up a bit, which will improve outlook for exports Indicators point to a certain pick-up in manufacturing in coming months Private sector consumption continues to receive reliable boost from labor market Reduction in unemployment is being slowed by refugee intake 11:04 Italy moves quickly to replace Prime Minster Renzi MUFG Lee Hardman, Currency Analyst at MUFG, notes that in the main development from the Eurozone over the weekend Italian President Mattarella has asked outgoing Foreign Minister Gentiloni to form a new government. ldquoPresident Mattarella had emphasized that Italy needs a ldquofully functional government within a short time framerdquo in order to meet its domestic, European, and global commitments. As there have been no significant defections from the coalition since Prime Minister Renzi resigned, former Foreign Minister Gentiloni should be able to count on a combination of the centre-left Democratic Party and other centrists to stay in power. rdquo ldquoThe leader of the Five Star Movement Luigi Di Maio has called Gentiloni a Renzi ldquoavatarrdquo. It has been reported that he is likely to face pressure to step aside in the first half of next year because former Prime Minister Renzi wants to hold early elections ahead of the next scheduled elections due early in 2018. Former Prime Minister Renzi reportedly plans to call a Democratic Party congress early next year to confirm him as their leader before standing as its candidate in early elections. Holding early elections would reinforce our outlook for a weaker euro in 2017.rdquo ldquoA caretaker government led by Gentiloni is expected to have a short shelf life. The main priorities will be to harmonise the electoral laws for the lower and upper houses which President Mattarella described as ldquoindispensablerdquo before holding a vote, and addressing urgent problems in the banking sector. It follows the announcement late last week that the ECB has rejected a request from Monte dei Paschi di Siena for extra time to raise private capital. rdquo 11:04 US Dollar flat around 101.60 ahead of FOMC The greenback, tracked by the US Dollar Index . is trading almost unchanged at the beginning of the week, currently hovering over the 101.60 area. US Dollar finds support near 101.50 The index is navigating a tight range on Monday as market participants continue to adjust to the potential 25 bp rate hike by the Federal Reserve at its meeting on Wednesday. In the meantime, USD is looking to consolidate Novemberrsquos rally around the mid-101.00s, with gains so far capped by the 13-year top above the 102.00 handle and support around last weekrsquos lows in the mid-99.00s. Expectations of further tightening by the Fed on Wednesday, prospects of higher inflation in the US economy in the next months and a persistent steady/dovish stance from Fed peers all continue to give support to the buck. Adding to the above, the latest CFTC report showed USD speculative net longs have climbed at the highest level since August 2015 on the week to December 6. US Dollar relevant levels The index is losing 0.03 at 101.57 and a breakdown of 101.06 (20-day sma) would aim for 99.87 (low Dec.5) and finally 99.49 (low Dec.8). On the flip side, the initial hurdle is located at 101.80 (high Dec.5) ahead of 101.88 (high Nov.30) and finally 102.12 (2016 high Nov.24). 11:01 GBP/USD has been sidelined From a technical perspective the outlook for GBP/USD is probably no worse than neutral. The alignment of the 50-200-800 simple moving averages, on the 1hr chart does not show a clear trend in existence, nor the below 30 ADX at the moment is a sign of a constructive price structure. The prospect for the building of triangles, rectangles, and pennants looks to be quite realistic. Traders may opt to capitalise on such chartist patterns and their price projections. 11:01 USD/RUB remains well offered USD/RUB is capturing attention with its sustained price move and soaring volatility. The search for a low in todays trading is reflected in the 2-standard deviation bands expanding for several consecutive hours. Moreover, the near-term technical picture shows recent close prices printing below the 50 exponential moving average, a bearish condition that should it persist, would help maintain prices below the SAR indicator. The parabolic SAR has yet to switch direction after two sessions of downward price movement. By doing so means shorts are taking profit. Risks exist the volatility and down drift extend to higher time frames. 10:59 WTI strongest since July 2015 on global output cut deal Oil futures on NYMEX witnessed a bullish opening gap on Monday, starting a new week with a bang after oil traders cheered the joint oil output cut deal reached between the OPEC and non-OPEC producers for the first time since 2001. Oil: Attention turns to OPEC, non-OPEC meeting Currently WTI advances 5.17 to 54.16, reverting towards fresh seventeen-month highs of 54.50 reached earlier today. Oil prices keep the ongoing rally intact and consolidate the upside as markets assess the implications of the deal signed after years of disagreements and arguments between the OPEC and non-OPEC producers. Analysts at Goldman Sachs noted, ldquoWe believe that the observation of the OPEC-11 and non-OPEC 11 production cuts is required to sustainably support. oil prices to our 1H17 WTI price forecast of 55 a barrelquot quotThis forecast reflects an effective 1.0 million barrels per day (bpd) cut vs. the 1.6 million bpd announced cut and greater compliance to the announced cuts is therefore an upside risk to our forecasts. quot OPEC planned an output cut by 1.2 million bpd from Jan. 1, with the non-OPEC producers now agreeing to reduce output by 558k bpd, slightly short of 600k bpd expectations. Next of note for the black gold remains the FOMC meeting due later this week, which is expected to have major impact on the US dollar, eventually impacting the USD-denominated oil. WTI technical levels A break above 55 (key barrier) could yield a test of daily R2 of 55.58. On the lower side, breach of support at 53.67 (daily pivot) would expose the daily low of 52.59.rdquo 10:46 AUD/USD could slip back towards 0.7310/12 Commerzbank According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, spot could grind lower to the 0.7310 area. ldquo AUD/USD last week saw only a minor erosion of the 38.2 retracement at .7490 and reversed well ahead of the 55 and 200 day ma at 7532/62. We suspect that the near term strength has ended and ideally we look for failure (favoured) and a retest of the .7312/10 mid June low and the 78.6 Fibonacci retracement at .7287/81rdquo. ldquoFurther down lurks the May low at .7146. We view AUD/USD as having topped and eventually expect it to slide back to the .6828 January low. A close below the .7420 support line would add weight to our viewrdquo. ldquoAbove .7565 will delay our bearish outlook and allow for .7600 and potentially .7678rdquo. 10:38 USD/JPY hits 116.00 handle amid prevalent risk-on mood The USD/JPY pair maintained its strong bid tone and jumped to 116.00 handle for the first time since Feb. 8. Weekend oil output deal between OPEC cartel and non-OPEC producers led to a fresh wave of risk-on trade on Monday and is seen weighing heavily on traditional safe-haven assets, including the Japanese Yen. Even the upbeat release of Core Machinery Orders from Japan did little to restrict the pair39s strong up-move on Monday. Meanwhile, the bullish US Dollar consolidative move, amid firm expectations of an imminent Fed rate-hike action on Wednesday, is also supportive for the pair39s strong up-move to 10-month peak. Investors will also look forward to the Fed39s updated economic and interest rate projections (dot-plots), accompanying the monetary policy decision announcement, in order to evaluate possibilities and timing of next Fed rate-hike move in 2017, which would eventually provide fresh impetus for the pair39s next leg of directional move. Technical levels to watch A follow through buying interest has the potential to continue boosting the pair towards its next major hurdle near 116.75 region, with 116.50 region (Jan. 21 low) acting as intermediate resistance. On the downside, weakness below 115.50-40 immediate support could get extended towards session low support near 115.15 level below which the pair could extend its corrective slide towards 114.50 region. 10:38 EUR/USD firmer, advances to highs near 1.0580 The single currency is now picking up extra pace, lifting EUR/USD to the area of fresh daily peaks near 1.0580. EUR/USD under pressure, focus on data, FOMC Spot has managed to bounce off recent lows in the 1.0530/25 band following a now softer tone around the greenback at the beginning of the week. Despite the ongoing correction higher, spot stays under pressure following last weekrsquos dovish stance from the ECB at its meeting, while the prospects of a rate hike at the FOMC meeting on Wednesday also weighing on sentiment from the USD-side. Nothing scheduled today in both Euroland and the US, although cautiousness is expected to grow bigger as we get closer to the FOMC gathering. In the meantime, the ZEW Survey in Germany and the euro area on Tuesday should give a glance of investorsrsquo sentiment in the area. From the speculatorsrsquo view, EUR net shorts have dropped to the lowest level since mid-October during the week ended on December 6. EUR/USD levels to watch The pair is now up 0.15 at 1.0572 facing the next resistance at 1.0629 (20-day sma) followed by 1.0798 (high Dec.5) and finally 1.0873 (spike post-ECB Dec.8). On the flip side, a breakdown of 1.0515 (low Nov.24) would target 1.0503 (2016 low Dec.5) en route to 1.0457 (2015 low Mar.16). 10:15 EUR/USD still a sell on rallies Danske Bank Analyst Mathias Mogensen at Danske Bank still recommends selling the pair on occasional up ticks. ldquoCurrencies of oil-producing countries gained further overnight as the OPEC deal was officially announced. As for the rest of the FX market, we will probably have a relatively quiet start to a very busy week, as investors digest the news of the OPEC deal and await the FOMC meeting on Wednesday where both we and the market expect the FOMC to hike the Fed Funds raterdquo. ldquoAlthough a 25bp rate hike is almost fully priced in, we still see a case for a further short-term squeeze lower in EUR/USD ndash especially as the ECBrsquos Draghi last week managed to deliver a relatively dovish message at the ECB meeting. Hence, in the short term, our tactical view is still to sell on ralliesrdquo. ldquoHowever, while we could still see EUR/USD dropping below 1.05 in the short term, we still hold the view that EUR/USD is likely to go higher in 2017 despite Trump. Beside the fact that flows and positioning are EUR positive and that EUR/USD is fundamentally very oversold, we also note that the Fedrsquos trade-weighted dollar has reached the strongest level since 2002. If the USD becomes too strong, the Fed will turn dovish exactly as it did early this yearrdquo. ldquoWe target EUR/USD at 1.12 in 12M and we advise EUR - and DKK-based clients with USD income/assets to take advantage of a possible further USD rally and increase hedge ratio on USD exposurerdquo. ldquoGiven the large political uncertainty surrounding both EUR and USD next year (elections and Brexit in Europe and Trump), we generally recommend to hedge USD exposure via options that maintain a profit potential in the event of further decline in EUR/USD next yearrdquo. 10:12 GBP/USD retakes 1.2600 handle but lacks momentum The GBP/USD pair built on to its early recovery momentum and has now reversed Friday39s minor losses to move back marginally above 1.2600 handle. After spending majority of the Asian session the said handle, the pair caught fresh bids during early European session amid subdued greenback price-action. The momentum, however, lacked conviction as investors now look to central bank decisions from both, the US and UK later during this week. The US Federal Reserve is widely expected to raise interest rates by 25 bps on Thursday, while the Bank of England . on Thursday, is expected to keep its current monetary policy stance unchanged. Meanwhile, the accompanying rate-statements and subsequent press conference would be looked upon for fresh insights over the central banks near-term monetary policy outlook and help investors determine the pair39s trajectory in the near-term. In absence of any major market moving releases on Monday, the pair would take clues from the broader sentiment surrounding the US Dollar, which would continue to be driven by expectations over the pace of Fed rate-hike next year. Technical levels to watch A follow through buying interest, leading to a momentum above 1.2620 resistance (Friday39s high), is likely to trigger a short-covering rally immediately towards 1.2670-75 intermediate resistance en-route 1.2700 round figure mark. On the downside, weakness below session low support near 1.2575 level is likely to drag the pair back towards an important support near 1.2550 region, which if broken might accelerate the slide towards 1.2500 psychological mark. 10:04 USD/JPY bid above 113.84 Commerzbank In view of Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pairrsquos bias stays bid above 113.84. ldquo USD/JPY has eroded its 100 week ma at 114.74, and appears to already be resuming its up move. Last week price action held rigidly above the Imoku 1 support, currently at 113.84 and the market is immediately bid above here. We note the 13 count on the 60 minute chart and may see a small dip lower very near termrdquo. ldquoAbove here we also have the 61.8 retracement of the move 2015- 2016) at 116.00 and we are allowing for a near term consolidation. Above here would target 120.00/120.10, the 78.6 retracement of the move down from 2015rdquo. 10:02 Denmark Inflation (HICP) (YoY) remains at 0.1 in November 09:59 ECB: Greater longevity, exibility and asymmetry in the APP Goldman Sachs Lasse Holboell Nielsen, Research Analyst at Goldman Sachs, notes that the ECB in its latest meet announced a continuation of its Asset Purchase Programme (APP) for a further nine months, from April 2017 to December 2017 (ldquoor beyond, if necessary, and in any case .. until a sustained adjustment in the path of ination consistent with its ination aimrdquo). ldquoThe monthly pace of asset purchases will slow as from April 2017 to euro60bn, from the current pace of euro80bn per month. This is lower than we expected. rdquo ldquoAt the post-meeting press conference, President Draghi emphasised then longevity of the asset purchase programme. He mentioned several times that lsquotaperingrsquo (which he dened as a gradual path of reduction to zero purchases) had not been discussed during the meeting. More specically, Mr. Draghi stated that the Governing Council had chosen a nine-month extension at euro60bn per month over a shorter six-month extension at a faster euro80bn per month pace. Mr. Draghi also emphasised that the ECB sought to maintain ldquoa sustained market presenceldquo through extending the duration of the programme. rdquo ldquoThe Governing Council introduced greater exibility into the implementation of asset purchases, introducing the possibility of increasing the pace and/or duration of the APP should the ldquooutlook become less favourableldquo or if nancial conditions tighten excessively. rdquo ldquoThe new exibility in the programme was styled as asymmetric. By contrast with the explicit signal of increased purchases should conditions deteriorate, Mr. Draghi described any prospects of moving below the euro60bn monthly purchase pace as ldquofar, far away. rdquo ldquoIn terms of the broader macroeconomic outlook, the ECB staff forecast was left essentially unchanged from September. The (new) ECB forecast for ination in 2019 was 1.7. Mr. Draghi characterised this forecast as ldquonot reallyldquo in line with the ECBrsquos objective (HICP ination ldquobelow, but close to, 2pardquo), thus providing a macroeconomic rationale for the extension of asset purchases. rdquo ldquoWith latest announcements we maintain our forecast that the APP will continue through 2018 (at a progressively reduced pace from the euro60bn per month we will see from April to December next year).rdquo ldquoWe maintain our view that the rst ECB rate increase remains distant. We do not expect the rst hike until end-2019, somewhat later than current market pricing. rdquo 09:53 EURCAD: Short, medium and long-term trend oscillators are moving into bearish alignment - Scotiabank EURCAD closed out a fifth, consecutive losing week at its lowest level in nearly 18 months as noted by the Analysts at Scotiabank. ldquoThe cross has had a very poor few weeksmdashreversing strongly from 1.50, falling below major trend support in the low 1.44s and losing long-term, retracement support at 1.4203. As noted previously, weekly and monthly bear reversals were signaled by Novemberrsquos price moves and the loss of support at 1.42 implied a drop to the 76.4 retracement at 1.3755mdash which looks reachable in the relative near-term. Beyond that, there is some support around 1.35 but little, major support until the 1.30 area. rdquo ldquoWe are not excluding the risk of the bear move extending towards 1.30/1.35 in the next few months. Short, medium and long-term trend oscillators are slowly moving into bearish alignment, which will aid and abet the slide and limit scope for EUR counter-trend rallies. rdquo 09:43 ECB: The beginning of the end of QE Commerzbank After the ECB opted to prolong its bond purchases by nine months and to lower the volume to euro60bn, investors are asking whether this marks the beginning of the process of exiting from bond purchases notes Dr Joerg Kraemer, Chief Economist at Commerzbank. lsquoThe ECB knows that from the beginning of 2018 onwards it will have bought up one third of German and Italian government bonds. It would then have reached its self-imposed upper limit, which for legal reasons it cannot simply raise, as Draghi stressed. So at some point it will in any case be forced to taper off purchases. It thus makes sense to try out a moderate reduction in the monthly purchase volume. The timing is good in that, with the attempted senate reforms in Italy failing on Monday, Italian government bonds have proved highly resilient. rdquo ldquoTo ensure that they remain so, Draghi took steps at latest press conference to reassure people. First, he announced that if need be the volume of purchases would be increased again. Second, the bank extended the pool of eligible bonds by stating that in future it could formally also buy bonds with a residual maturity of only one year. This increases the volume of bonds eligible for purchase and mathematically reduces the percentage of bonds it holds. We now estimate that the ECB would reach the 33 upper limit six months later. And finally, the bank has created the option of also buying bonds when their yield is below the deposit rate. rdquo ldquoThe ECB did everything it could to reassure the market after reducing its purchase volume. In 2018, however, it will be forced to scale down purchases gradually if it is not to exceed the legal limit. Yet this does not mean an end to the bank39s very generous monetary approach. The causes of the government debt crisis are after all more acute than ever, and there is a threat of it re-emerging. rdquo ldquoConsequently, the Eurozone cannot settle down. Growth remains unstable, and contrary to what the ECB is hoping, core inflation is unlikely to see a sustained increase. As a result, the bank can be expected to adopt aggressive countermeasures once it is forced to end its bond purchases, probably in 2018. It could, for example, offer the commercial banks a long-term tender with a maturity of around five years. This would enable banks in the southern Eurozone countries to buy up their own bonds with cheap ECB money, taking over from the ECB as buyers. So sadly, it does not mark the beginning of the end of far too relaxed a monetary policy. rdquo 09:42 USD/CAD extends the drop, approaches 1.3100 The Canadian dollar remains on a firm fashion vs. its American peer on Monday, dragging USD/CAD to the vicinity of the 1.3100 handle, fresh session lows. USD/CAD lower on WTI gains CAD is deriving extra support from the rally in crude oil prices, with the barrel of West Texas Intermediate hovering over fresh 17-month tops above the 54.00 mark following the recent agreement between non-OPEC producers no cut the oil output by nearly 560K bpd. In addition, the buck is trading almost unchanged so far today amidst rising cautiousness in light of the upcoming FOMC meeting and the likeliness of a 25bp rate hike on Wednesday. In addition, and as shown by the latest CFTC report, CAD speculative net shorts remained in the area of multi-week lows, while Open Interest dropped to the lowest level since mid-October on the week to December 6. USD/CAD significant levels As of writing the pair is losing 0.52 at 1.3117 facing the next support at 1.3063 (200-day sma) ahead of 1.3002 (low Oct.19) and finally 1.2996 (low Sep.29). On the other hand, a break above 1.3193 (100-day sma) would open the door to 1.3311 (38.2 Fibo of the 2016 drop) and then 1.3357 (high Dec.5). 09:40 GBP/JPY darting back towards 146.00 handle The GBP/JPY cross was seen building on to its recent break-out momentum above the very important 200-day SMA resistance and is now inching closer to over 6-month highs touched last week. Currently trading around 145.80 region, testing session peak, the cross extended its near-term bullish trajectory, and after advancing for eight consecutive weeks, gained fresh traction on Monday amid prevalent risk-on mood in wake of weekend deal over oil output cut between OPEC and non-OPEC members. Even from technical perspective, sustained trading above 200-day SMA, for the first time in 2016, is suggestive of a bullish break-out and has thus increased possibilities of continuation of the pair39s appreciating move in the near-term. Technical levels to watch On the upside, last week39s multi-month high near 146.00 handle is likely to act as immediate resistance above which the pair seems to dart towards 147.00 round figure mark before eventually heading towards its next major resistance near 147.95-148.00 region. On the flip side, 145.00 psychological mark now becomes immediate support to defend, which if broken might trigger a corrective slide back towards 200-day SMA support near 143.30 region, with 144.40 and 144.00 mark acting as intermediate support levels. 09:30 BOJ likely to upgrade economic view next week - RTRS Sources Reuters quotes sources familiar with the matter, noting that the Bank of Japan (BOJ) officials are likely to upgrade economic view next week, reflecting optimistic economic view. Reuters sources also noted that the BOJ officials think global trade emerging from doldrums and they seem encouraged by signs of recovery in Japanese private consumption. 09:28 USDCAD weaker but decline perhaps losing momentum - Scotiabank Analysts at Scotiabank notes that the USDCAD retains a soft undertone after two weeks of steady losses. ldquoShort-term charts do suggest that the USDrsquos slide is losing momentum (a descending wedge on the hourly chart and small, inside range on the 6-hour chart) but there is scantmdashas in nomdashsign of a reversal in the daily trend lower at the moment. Spot has lost important support in the low/mid 1.32 area this week but signs of a slowing in the decline is coming a little ahead of the 76.4 retracement of the Oct/Nov rally at 1.3145.rdquo ldquoWe note important, long-term support below here at 1.3090/00, where the base of the broader USD bull trend currently resides. Short-term trend momentum signals are aligned bearishly for the USD, suggesting the USD may struggle to improve significantly at the moment. We think the USD needs to get back above 1.3240/50 in order to stabilize or improve from here. rdquo 09:24 NZD/USD targeting 0.7200 this week - Westpac The stalled US dollar allows NZrsquos strong fundamentals (referenced by RBNZ Governor Wheeler) to come to the fore of the NZD/USD market, targeting 0.7200 this week suggests Imre Speizer, Research Analyst at Westpac. ldquoDairy prices are an important medium term influence on the NZD, but only a weak influence short term. Still, the 95 rise in WMP since Feb is significant, resulting so far in an increase in the farmer milk payout from 4.25/kg to 6.00. All else constant, the higher dairy prices should eventually boost the NZD. rdquo ldquoTechnically, there may be some resistance near term at around 0.7200 which is previous trend support. However daily momentum has flipped to positive so the risks are for even higher during the week ahead. rdquo 09:20 JPY traders put their shorts on - Scotiabank CFTC positioning report covering data up to Tuesday December 6 highlighted the fact that speculative investors turned net short (barely) JPY for the first time in 2016 notes Research Team at Scotiabank. ldquoThis weekrsquos update suggests that futures traders did little else but pile on JPY shorts this week. In aggregate, broader sentiment is the most bullish USD since the start of the year. Overall positioning long the USD rose USD3.4bn in the week through Tuesday to reach USD29.7bn, the biggest bull bet on the USD since January. rdquo ldquoThe JPY trade accounted for all of that increase investors were only small short JPY last week but lifted positioning aggressively through Tuesday to stake out a net short of USD3.7bnmdashan increase on the week of 34k contracts from basically flat. The bearish positioning swing over the past three months is the largest in four years and reflects the sharp deterioration in JPY sentiment as US-Japan long-term yield spreads widen to the biggest yield premium for the USD since 2010.rdquo ldquo EUR sentiment was more or less stable in the week net EUR shorts remain significant and still represent the biggest single bear bet on the USD and net short exposure was trimmed only modestly running into the ECB meeting. Net GBP shorts were cut slightly this week and while net shorts were built in the NZD and CHF, the change and net positioning is minor. rdquo ldquo CAD sentiment remains largely negative net exposure was reduced very slightly in the week as both gross shorts and longs pared exposure. rdquo 09:17 Forex Today: USD/JPY hits new 10-months tops in Asia, FOMC - Key The Asian markets opened the Big week on a bullish note, with risk-on moods prevalent across Asia amid rallying oil prices, in wake of weekendrsquos oil output deal reached between OPEC and non-OPEC producers. Hence, the yen emerged the weakest amid non-existent safe-haven flows, while broad based US dollar upside consolidation drove moves across the fx space. Looking ahead, the FOMC interest rate decision remains the much-awaited and highly influential event of this week, which will set the tone for the markets for the balance of this holiday-thinned month. In the meantime, markets will take cues from the Chinese data dump, UK CPI, US retail sales and BOE Carneyrsquos speech. Later today, we have a data-empty EUR and US calendar, and hence, oil-driven market sentiment will continue to influence fx pairs. Main topics in Asia Oil: what a mover, to highest levels since July 201539s glut sell-off from 56 Oil is much higher in early Asia on the back of the weekend news with a gap through 52.00 and has reached a high of 54.31 in WTI so far. NZIER: Forecasters have revised up their NZ growth and inflation forecasts The New Zealand Institute of Economic Research (NZIER) published a forecast from economists for the NZ economy on Monday, with the forecasts for growth and inflation revised upwards. UKrsquos BCC: UK 39s current GDP growth rate won39t last ndash BBC News The UKrsquos British Chambers of Commerce (BCC) upgraded its 207 growth forecasts for the UK economy, although warned that higher growth prospects are unsustainable in wake of uncertainty over the UK39s EU relationship. BOJ quotmay soon have to think about tightening for the first time since 2007quot - WSJ The Wall Street Journal (WSJ) ran a story over the weekend, noting that Japanese central bank the BOJ may soon have to resort to tightening for the first time since 2007 in wake of higher inflation expectations from the Trumprsquos presidency. BOJ tapering sees bond buying slow toward 70 trillion yen - BBG Bloomberg carried an article this Monday, noting that the Bank of Japan (BOJ) technically have retained their target for the annual increase in government bond holdings at 80 trillion yen (699 billion), there are signs the buying may come in closer to 70 trillion yen. Key focus for the day ahead EUR/USD under pressure, eyes on 1.0505 ndash Commerzbank Karen Jones, Head of FICC Technical Analysis at Commerzbank, noted the pair remains poised for a re-visit to recent lows at 1.0505. PBOCrsquos Sheng: Hike in interest rates is unlikely in China An advisor to the People39s Bank of China (PBOC), Sheng Songcheng, crossed the wires last minutes, via Bloomberg, noting that an interest rate hike is unlikely in China. Another repatriation wave into the USD - Westpac The US presidential election has given fresh impetus to another repatriation tax holiday for US corporate earnings held offshore notes Research Team at Westpac and they expect that the US equities and the USD will be the main beneficiaries, mostly in 2018. Fed December hikes: an annual thing - Rabobank Analysts at Rabobank said that it seems like we can add the Fedrsquos annual hike to the calendar as a recurring event in December. 09:04 AUD/USD recovers back above 0.7450 level The AUD/USD pair caught fresh bids at lower level and recovered over 25-pips from session low level near 0.7430 region. Currently trading around 0.7455-60 region, weekend deal between OPEC and non-OPEC member trigger a fresh wave of risk-on sentiment across global financial markets and is seen supporting the bid tone surrounding riskier / higher-yielding currencies - like the Aussie. Moreover, a subdued greenback price-action, as markets cautiously await for the Fed monetary policy decision on Wednesday, is further supportive of the pair39s recovery on the first trading day of the week. With a relatively empty economic docket . broader market risk sentiment would remain a key determinant of the pair39s movement on Monday. However, firming expectations that the Fed would certainly raise interest rates on Wednesday, coupled with growing speculations of fast rate-tightening cycle next year, is likely to restrict any sharp up-move and the pair might remain confined within its near-term trading range. Technical levels to watch On a sustained move above 0.7465 level (session peak), the pair is likely to make a fresh attempt to conquer 0.7500 psychological mark above which the momentum could get extended towards the very important 200-day SMA resistance near 0.7530 region. On the downside, decisive break below 0.7440-30 support (session low) seems to drag the pair immediately towards 0.7415-10 region ahead of 0.7400 round figure mark. 09:02 AUD/USD should test the 0.7577 - Westpac AUD/USD should test the 100dma at 0.7577 in the week ahead, aided by a softer USD post-FOMC meeting expects Sean Callow, Research Analyst at Westpac. ldquoAUD/USD trading ranges have narrowed of late, consistent with support from key commodity prices (spot iron ore gt80, coking coal 300) but upside is limited by lacklustre domestic data, simmering volatility in Asian capital flows and the US dollarrsquos underpinnings from the looming Fed rate hike. rdquo ldquoQ3 was weak across the board but home building and public spending at least should rebound in Q4. Another poor jobs reading would reinforce the gloomy domestic theme. Yet AUD has absorbed bad news recently with insulation from the lack of market desire to price in RBA rate cut risk, given its patience over inflation and the global mood. rdquo 09:01 Romania Consumer Price Index dipped from previous -0.4to -0.7 in November 08:59 USD/JPY should rise to 120 by end-2017 - Nomura Research Team at Nomura explains that if the Fed raises rates in December and carries out two additional rate hikes in 2017, as Nomurarsquos economists expect, USD/JPY will likely reach 120 by end-2017. ldquoUSD would tend to strengthen more in the latter half of the year, when we would know more about the Trump administrationrsquos fiscal policies. At the same time, there is considerable uncertainty about the USrsquos economic measures in 2018, and at this point we expect a neutral level of 114 at end-2018. For USD/JPY to stay above 120, we believe the US economy, which is already entering the last stage of its recovery, has to show a significant rise in productivity. rdquo ldquo BOJrsquos yield curve control to support JPY depreciation Although playing a secondary role, Japanrsquos fundamentals should also support a rise in USD/JPY, in our view. The BOJrsquos yield curve control measures have had a remarkable effect on keeping yen interest rates stable/low levels even as yields rise globally, and as the gap between yields widens, this is expected to weaken JPY. If USD/JPY nears 120, Japanrsquos inflation rate would likely rise to the mid 1 range, possibly spurring expectations in the market that the BOJ would taper its asset purchases. However, we do not expect inflation to exceed 2 as an underlying trend, and the BOJ is unlikely to take a hawkish stance during Governor Kurodarsquos term (which ends in April 2018).rdquo 08:52 EUR/USD under pressure, eyes on 1.0505 Commerzbank Karen Jones, Head of FICC Technical Analysis at Commerzbank, noted the pair remains poised for a re-visit to recent lows at 1.0505. ldquo EUR/USD last week briefly spiked up to 1.0875, this was exhaustive price action and attention has reverted to support at 1.0505 and 1.0467, the recent low and the March low. This remains a major break down point to parity and beyondrdquo. ldquoAbove 1.0875 would initiate a deeper retracement to 1.0910 then 1.1000 (this is not favoured) and while it would be enough to delay our bearish outlook, it is would not be enough to negate it. 08:45 PBOCs Sheng: Hike in interest rates is unlikely in China An advisor to the People39s Bank of China (PBOC), Sheng Songcheng, crossed the wires last minutes, via Bloomberg, noting that an interest rate hike is unlikely in China. He further added that rate hike is pending economic recovery. No further details have been mentioned on the same. 08:38 Gold hovering around 10-month lows Having recorded five consecutive week of losses, Gold extended its recent downward trajectory and dropped to the lowest level in over 10-month on Monday. The metal, however, has managed to pull back from session lows and is currently trading with mild weakness around 1157 region. Firming expectations of an eventual Fed rate-hike action this week has been curbing flows towards the non-yielding precious metal. Moreover, anticipated higher interest rates in the US has been the driving the US Dollar higher and is also weighing on dollar-denominated commodities - like gold. Adding to this, weekend oil output cut deal between OPEC and non-OPEC deal triggered a fresh wave of risk-on mood on Monday, which is eventually denting demand for traditional safe-haven assets and did little to halt the yellow metal39s ongoing depreciating move. Investors now anxiously await for the outcome of Fed39s two monetary policy meeting, scheduled to be announced on Wednesday. The accompanying rate-statement would provide policymakers projections for interest rates, and growth numbers, which would help investors evaluate the pace of monetary tightening next year and determine the next leg of directional move for the precious metal. Technical levels to watch Any recovery attempts now seems to confront immediate resistance near 1160 level above which the momentum could get extended towards 1169-70 horizontal resistance en-route 1173-75 resistance area. On the downside, weakness below 1154 session low support seems to drag the commodity towards 1150 support below which the metal seems to head towards testing 1140 support area. 08:35 GBP/USD upside capped by 1.2600, data, FOMC eyed The Sterling is posting marginal losses vs. the greenback at the beginning of the week, with GBP/USD sidelining below the 1.2600 handle. GBP/USD appears supported near .12580 The pair is following the generalized absence of a clear direction in the global markets, navigating within a narrow range and with gains so far limited around the critical 1.2600 barrier. Looking ahead, GBP should remain under pressure in light of the release of inflation figures for the month of November (Tuesday) and the labour market report (Wednesday), although the most salient event will be the FOMC meeting on Wednesday. Recall that a 25 bp rate hike seems to be already fully priced in, although market participants will shift their attention to the future rate path and the potential steps by the Federal Reserve in the next year. On the positioning side, GBP speculative shorts have been trimmed to the lowest level since early August, while net shorts have retreated from record levels during the week ended on December 6 and according to the latest CFTC report. GBP/USD levels to consider As of writing the pair is losing 0.02 at 1.2588 and a break below 1.2545 (low Dec.9) would expose 1.2530 (20-day sma) and then 1.2462 (55-day sma). On the flip side, the next hurdle aligns at 1.2706 (high Dec.8) followed by 1.2767 (100-day sma) and finally 1.2776 (high Dec.6). 08:34 Kazakhstan EnergyMin: 20K bpd output cut is token - RTRS Kazakhstan energy minister expressed his taken on the oil output cut deal, noting that the 20k bpd output cut agreed with OPEC is a lsquotokenrsquo, adding that they have no plans to limit output at Kashagan, Karachaganak or Tengiz projects. 08:34 USD/JPY tops 115 level, eyes on 120 now Deutsche Bank Taisuke Tanaka, Strategist at Deutsche Bank, expects the USD/JPY to top 120 if DBrsquos new US yield forecasts could materialize. ldquoThe USD/JPY has already reached our 2017 forecast level of 115. Our revised forecast of 115 announced on 15 November was based on assumed 10-year 5year, and 2-year US Treasuries yields of 2.5, 1.75, and 1.25, respectively, as of June 2017. However, and as we have repeatedly mentioned, a further overshoot is possible, depending on the degree of autonomy for the macropolicy Mr. Trump has committed to. rdquo ldquoOur economist team has further raised the US economic growth forecasts, to 3.0 for 2017 and 3.3 for 2018. They state that in the near term, growth will likely be considerably above 4 on a quarterly basis, and could reach 5 for 12 quarters. He even says that these forecasts are conservative, and that if they prove incorrect US GDP would be on course to top our expectations. rdquo ldquoOur US interest rate strategist has raised their US Treasuries yield forecasts to 3.60, 2.75, and 1.30 (same maturities as above) as of June 2017. As of 15 November, we assumed a rapid rally driven by the Trump market and set our USD/JPY forecast at 115 based mainly on five-year yield. However, the scenario that these new US yield forecasts could materialize suggests the USD/JPY to top 120 (although we have not yet officially revised our USD/JPY forecast).rdquo ldquoThis week, we look for the BoJ Tankan business conditions DIs (to be announced on 14 December) to show some improvement following the Trumpdriven market rally, which would confirm risk-friendly market sentiment. The FOMC is expected to decide on a rate hike on 14 December, and this would also be a clear support for the USD/JPY. However, even this rate hike by the Fed does not look particularly important for current USD/JPY trading. rdquo ldquoThe market has already factored in several rate hikes over the next 1-2 years, so this week39s anticipated hike is only a small step. When looking at the USD/JPY over the next few months, we need to consider both an overshoot and a correction following the rapid rally. However, the trend is clearly upward. rdquo 08:29 NZD/JPY pair should head towards the next resistance at 83.40 - Natixis Research Team at Natixis suggests that the NZD/JPY outlook remains favourable, as an ascending channel remains in evidence in the daily chart and an upward bubble is still developing in the weekly chart. ldquoUnder these conditions, the pair should head towards the next resistance at 83.40 (upper bound of descending channel in place since December 2014).rdquo ldquoA breakout above this resistance would instil new upward momentum, opening the way for a lasting rebound towards 84.70 (61.8 Fibonacci retracement of 94.08-69.04 downward wave from December 2014 to June 2016) before 86.30 (upper band of monthly Bollinger).rdquo ldquoTake advantage of any pullbacks towards 80.70 to buy the NZD/JPY, with as major target 86.30 (setting the stop loss below 79.40).rdquo 08:25 Oil: The first cut is not always the deepest - ANZ Philip Borkin, Senior Economist at ANZ, notes that in a surprise move, Saudi Arabia announced its intention to cut oil production even more than what was agreed with its OPEC counterparts last month. ldquoFollowing hot on the heels of an announcement by a number of non-OPEC countries over the weekend (11 in total, including Russia and Mexico) to cut production by 558k barrels per day, the Saudi oil minister stated that ldquoI can tell you with absolute certainty that effective January 1 wersquore going to cut and cut substantially to be below the level we have committed to on November 30.rdquo Clearly all eyes will be on how oil prices take this latest news, but one would have to think it will be price supportive, which could therefore have wider implications for the likes of the broader commodity picture, commodity currencies, energy stocks and market-based measures of inflation expectations to start off the week. rdquo ldquoBut how significant a rally are we talking Well the fact that 1) the oil market still has a large inventory overhang to work through 2) shale oil producers continue to wait in the wings for any decent price bounce and 3) history has taught us to be a little skeptical given non-compliance to such agreements, it is hard to see oil prices surging meaningfully higher just yet. rdquo 08:24 Russian OilMin Novak: Oil prices between 50-60/bbl comfortable for Russian budget Russian energy minster Novak is on the wires now, via Reuters, noting that the oil-price range between 50-60/bbl is in line with the Russian budget. 08:19 EUR/USD consolidates the Asian recovery ahead of FOMC week The recovery in the EUR/USD pair from near 2016 lows lost legs just shy of 1.0570, with the bulls now struggling hard to retain the bids as we progress towards the European opening bells. EUR/USD back above daily pivot at 1.0544 Currently, EUR/USD turns positive near 1.0560, although finds fresh sellers lurking just ahead of the last. The main currency pair paused its recent losing streak and jumped back on the bids amid an extended phase of bullish consolidation seen in the greenback across the board, after last weekrsquos rally in light of monetary policy divergence tilting in favor of the Fed and the buck. The recovery in the major looks fragile and short-lived as the US dollar is expected to rule the roost going forward, with a 25bps Fed rate hike priced-in by investors. While markets also continue to digest the dovish guidance provided by the ECB last week. Ahead of the FOMC decision due in the second-half of this week, markets will look forward to the German ZEW sentiment and US retail sales data for fresh incentives on the pair. EUR/USD Technical Levels In terms of technicals, the pair finds the immediate resistance 1.0607 (5-DMA). A break beyond the last, doors will open for a test of 1.0621 (20-DMA) and from there to 1.0642 (10-DMA). On the flip side, the immediate support is placed at 1.0526 (5-day low) below which 1.0503 (multi-month low) and 1.0456 (March 2015 low) could be tested. 08:16 USDCAD: Buckle up amp get long - TDS Mazen Issa, Senior FX Strategist at TDS, suggests to enter a long USDCAD position enter at 1.3150, target of 1.3650, stop-loss of 1.2900. ldquoSince USDCAD failed to sustain a break above 1.3600 ( 50 Fibo level from 2016 high/lows) on Nov 15th, price action has been notably heavy. We have long viewed the risks around USDCAD tilt higher from a fundamental perspective, but augured for patience despite attractive valuations. We think that turning point is near. rdquo ldquoThe 1.3100/50 area has acted as a key pivot zone for USDCAD. We think a re-test of this area offers a cleaner and more attractive technical entry point reinforced with solid trend-line support to re-establish firm USDCAD longs. While the CAD has been one of the better contained currencies within the G10 complex since the US electionmdasha point that should not be dismissedmdashwe think it will be difficult for the CAD to detether itself from a firm USD backdrop. rdquo ldquoWhile not our base case, we think that another BoC cut remains a non-trivial risk in 2017, and one that could receive consideration by mid-year. Currently, the OIS market is pricing in a modest probability of a rate hike by Q3 next year ( 7bps), which we strongly lean against, though we note a near-term catalyst to change front-end dynamics remains elusive for now. Indeed, our economists apply a subjective probability of 30-40 of a cut next year as the risks to the growth outlook remain titled to the downside: the export rotation has been uneven, business investment remains a disappointment, housing market imbalances persist and we judge the fiscal multiplier assumed by the BoC as too high. rdquo ldquoThe recent BoC statement noted that economic slack is wide in Canada compared to the US. To us, this explicit acknowledgement by the BoC cements the idea that policy will diverge for some time. rdquo ldquoOil prices are expected to grind towards 60/bbl over 2017. We think a lot of lsquogood newsrsquo post-OPEC deal is already in the price and that a Trump Presidency should keep UST yields elevated. Against this backdrop, we expect G10FX to show greater deference to rate spreads. USDCAD is no exception though a slightly higher profile for oil should limit the overshoot implied by rates. rdquo ldquoThe upcoming Fed meeting is expected to reveal a cautious tone/dovish hike. We would use this as an opportunity to scale into a USDCAD long as January nears, which tends to be the best performing month (even when the January 2015 surprise hike is excluded).rdquo 08:00 Japan Machine Tool Orders (YoY) increased to -5.6 in November from previous -8.9 07:32 USD/CNY regains 6.90 as USD strengthens ahead of FOMC The Chinese currency resumed its decline versus its American counterpart on Monday, after a minor-recovery staged last Friday, as the greenback advanced sharply against its six major peers in anticipation that the Fed will hike rates by 25bps this Thursday. A trader at a big Chinese bank in Beijing, quotThe yuan faces depreciation pressure as the US dollar strengthened ahead of the expected rate hike this week. The yuan faces depreciation pressure as the US dollar strengthened ahead of the expected rate hike this week. quot The Yuan weakened per dollar also as the Chinese central bank, PBOC, lowered the Yuan fix 6.9086, 114 basis points lower than Fridayrsquos fix of 6.8972. Meanwhile, the USD/CNY pair almost unchanged at 6.9077 at mid-day, flirting with daily highs of 6.9085. 07:28 CAD: One more leg down toward 1.3080 - BBH Research Team at BBH notes that the Canadian dollar was the strongest of the majors, gaining 2 against the US dollar. ldquoSteady oil prices at elevated levels and the fact that Canada39s discount on two-year money finished at the lows for the week may have been contributing factors. Typically, the Canadian dollar performs well in a strong US dollar environment. Last month, the US dollar was repulsed after testing the 50 retracement objective of the down move since the multi-year high was set at the start of the year a little below CAD1.4700.rdquo ldquoTechnical indicators are getting stretched, and the Canadian dollar strengthened six of the past seven sessions. If the move is not exhausted, there may be one more leg down toward CAD1.3080. A move back above CAD1.3220 may be the first sign that the US dollar has bottomed. rdquo 07:15 Another repatriation wave into the USD - Westpac The US presidential election has given fresh impetus to another repatriation tax holiday for US corporate earnings held offshore notes Research Team at Westpac and they expect that the US equities and the USD will be the main beneficiaries, mostly in 2018. ldquoThe incoming Trump administration, aided by a Republican-controlled Congress, is set to pursue broadbased US tax reforms. A major piece of any tax reform will be how to deal with 2.6trn in accumulated profits held offshore by US corporates. Any changes to the US tax code on this front could give a significant boost to US equities and the USD. rdquo ldquoUnlike most advanced countries, the US code taxes profits earned by the foreign subsidiary of US companies. However the tax code also allows US corporates to indefinitely reinvest overseas earnings offshore and defer paying the full 35 corporate tax rate on these profits until they are officially repatriated back the US, through a dividend or otherwise transferred back to the US parent. To avoid paying the tax US corporates have hoarded substantial sums overseas, about 2.6trn. rdquo ldquoThe US presidential election has given fresh impetus to a repatriation tax holiday as part of a broader overhaul of the US tax system. The exact timing is uncertain but itrsquos reasonable to assume that legislation will be passed in late 2017 and implemented in 2018.rdquo ldquoThe potential boost to the economy is questionable, even if the legislation requires that the funds be earmarked for hiring and investment like 2004. Payrolls and investment were solid in 2005 during the repatriation tax holiday but they were solid in 2004 and 2006 too. The current 2.6trn hoard overseas is highly concentrated in the tech, energy and pharmaceuticals industries - industries that already enjoy more free cash than they know what to do with. In any case, creative structures allow US companies to regularly access these offshore profits. For example some corporates such as Apple engage in ldquosynthetic repatriationrdquo borrowing in US capital markets against their overseas holdings to fund share buy backs and avoid paying the 35 tax. rdquo ldquoStocks will be the main winner. As in 2005, repatriated earnings are likely to be used to fund share buybacks. rdquo ldquoThe USD should be a big beneficiary too. About 30 of the stock of US earnings offshore was repatriated in 2005. Applying a similar ratio to todayrsquos 2.6trn hoard implies a hefty 780bn in repatriation. But a substantial majority of that is probably already denominated in USD. Company filings from Apple and Microsoft, the two largest holders of offshore earnings show that 80 of their combined offshore earnings are maintained in USD securities. rdquo ldquoEven so, 80 of earnings held in USD still implies a hefty 155bn in corporate demand for the USD. That is negligible compared to daily FX turnover but nonetheless represents yet another positive for the USD which is already enjoying solid support from increasing yield support and heightened EU political tail risks. The most vulnerable currencies appear to be EUR, CAD, GBP and CHF. rdquo ldquoBeyond that there could be longer term ongoing benefits for the USD. A potentially significant decline in the US corporate tax rate from 35 to 15 (Trump39s plan) or 20 (the House Republican plan) would reduce the incentive to hoard cash overseas, especially if the House Republican plan is adopted. Their policy calls for a one-time repatriation tax and then a shift to a quotterritorial systemquot of taxation, ending the US practice of taxing global earnings permanently. rdquo 07:10 USD/JPY stalls correction, re-takes 115.50 The US dollar regained poise versus its Japanese counterpart in the late-Asian trades, sending USD/JPY back higher towards multi-month highs of 115.62. USD/JPY bounces-off daily S3 support The dollar-yen pair stalled a brief downside correction from fresh 10-month highs, as the bulls fought back control amid resurgent USD demand in a risk-friendly market environment, triggered by oil-price rally and bets over an imminent Fed rate hike this week. Earlier on the day, the yen staged a tepid-recovery, knocking-off USD/JPY to 115.15 lows, in response to BOJ taper and tightening chatter. While upbeat Japanese core machinery orders also offered some respite to the yen bulls. The spot is last seen changing hands at 115.51, up 0.10 on the day. USD/JPY Technical levels to watch The major finds immediate resistance at 115.62 (multi-month high). A break above the last, the major could test 116 (zero figure) and 116.50 (psychological levels) beyond the last. While to the downside, the immediate support is seen at 115 (round number) next at 114.77 (5-DMA) and below that at 114.29 (10-DMA). 07:09 JPY and GBP losing steam against the USD BBH Research Team at BBH notes that the last session was the first since February that the US dollar remained above JPY114.00 and in fact, it made a new 10-month high near JPY115.30. ldquoThe JPY115.60 area corresponds to a 61.8 retracement of the dollar39s decline since reaching almost JPY126 in June 2015. Above there is initial potential toward JPY116.00-JPY116.20. The technical indicators have not confirmed the new dollar highs, but the momentum is strong. Initial support is seen near JPY114.50.rdquo ldquoWhile the yen was the weakest currency last week, shedding almost 1.5, sterling was just behind it with a 1.25 decline. Sterling snapped a two-week advance. Disappointing data, broad dollar strength, and the UK parliament39s support for the government39s timetable of triggering Article 50 took a toll. Early in the week, sterling had reached 1.2775, its highest level since just before the flash crash, but just shy of the 100-day moving average ( 1.2795). It has not traded above that moving average since the referendum. The 1.25 area offers initial support, and a break could see 1.24 in short order. A break of 1.23 would likely signal the end of the two-month correction. The RSI has turned down. The MACDs and Slow Stochastics may rollover near week. rdquo 07:03 NZD/AUD to target the 0.9700 area during the weeks ahead - Westpac NZD/AUD cross retains upward momentum and targets the 0.9700 area during the weeks ahead, expects Imre Speizer, Research Analyst at Westpac. ldquoThat area marked a peak in July and should at least provide some resistance to this rally. rdquo ldquoThe AUD has underperformed the NZD recently, despite AU commodities easily outperforming NZrsquos. Part of the reason is undoubtedly skepticism that AU commodities can sustain the run. Another is the recent run of disappointing AU economic news. rdquo ldquoWe suspect the weak Q3 GDP result last week (-0.5 qoq) was a rogue print, with housing construction and public infrastructure sure to rebound. Export data has so far lagged the surge in commodity prices so we should get some good news on that front too. rdquo ldquoAfter the last weekrsquos dismal GDP data, any clues on a better Q4 will be watched closely. This week on Tue itrsquos Nov NAB business confidence, and on Wed we see Dec consumer sentiment from Westpac/MI but the market focus will be Nov labour data (Thu). Another poor jobs reading would reinforce the gloomy domestic theme. rdquo ldquo 3 months: Eventually we see NZD/AUD starting to reflect the outperformance of AU commodities as well as better economic data ahead. We expect a retest of the 0.9300 area which was visited a number of times during the second half of 2016.rdquo ldquoOur fair value model suggests the cross is around 10 overvalued at present, based on the movement to date in respective commodity prices and interest rates. Wersquore not expecting the cross to snap back to fair value anytime soon, since itrsquos been overvalued for much of this year, but it should at least start to move in that direction. rdquo 06:47 USD/CAD consolidates bearish gap amid 5 WTI rally The Canadian dollar keeps the range near two-month highs against its American counterpart in the late-Asian trades, with USD/CAD hovering ahead of 1.31 handle. USD/CAD dumped on Oil rally Currently, the USD/CAD pair is last seen exchanging hands at 1.3123, down -0.50 so far, having posted fresh two-month troughs at 1.3115 in early deals. The major opened with a bearish gap in Asia this Monday, as oil prices spiked over 4 after the Asian traders cheered the oil output cut deal between OPEC and non-OPEC deal was reached over the weekend. While Saudi Arabiarsquos commitment for aggressive cuts also added to easing oversupply worries, bolstering the bids for the black gold, and thus, eventually lifting the demand for the resource-linked Loonie. Oil is Canadarsquos top export product. The bearish momentum seen behind USD/CAD is also partly attributed to the subdued trading activity in the US dollar against its main competitors. Looking ahead, the major will get influenced by the sentiment around oil markets and upcoming US macro releases due on the cards this week. While the main market moving event for the spot this week remains the FOMC rate decision. USD/CAD Technical Levels To the upside, the next resistances are seen near 1.3157 (daily R1) and 1.3172 (5-DMA) and from there to 1.3200 (round number). To the downside, immediate support might be located at 1.3100 (round figure) and below that at 1.3085 (200-DMA) and at 1.3050 (Oct 18 low). 06:35 EUR: Bounces from the 1.05 level appear to be getting more shallow - BBH Euro bounces from the 1.05 level appear to be getting more shallow as technical indicators are not particularly helpful given the sharp swings in both directions in recent days, notes Research Team at BBH. ldquoThat said, the euro39s squeeze up to almost 1.0875 likely completed the upside correction we had been anticipating. We expect the 1.05 support area yield, with the euro heading toward 1.0430-1.0450 before corrective pressure emerges again. If the 1.05 is not broken, momentum traders will be sorely disappointed, and a bounce back to 1.07 would not surprise. rdquo 06:33 Japan Tertiary Industry Index (MoM) climbed from previous -0.1 to 0.2 in October 06:32 NZD/USD to remain in a 0.7000-0.7220 range during the week ahead - Westpac After a brief pop above 0.7200, NZD/USD hasnrsquot made any further headway despite a continuing stream of good economic news as noted by the Imre Speizer, Research Analyst at Westpac. ldquoThat is because the US dollarrsquos strength has trumped NZ fundamentals. We expect NZD/USD to remain in a 0.7000-0.7220 range during the week ahead, with the Fed meeting posing upside risks. rdquo ldquoNZrsquos event calendar this week is unlikely to ruffle the NZD, consisting of second-tier data only. We have Q3 manufacturing activity, Q3 building work, manufacturing PMI, ANZ consumer confidence, and REINZ housing market. The following week we get the next GDT dairy auction which will be watched given WMP has risen 90 since Feb. Futures pricing is predicting a 2 rise, which may not be enough to get a NZD response given last weekrsquos 4 did not. Indeed, while there is a relationship between dairy prices and the NZD over the long run, it is weak at best over the short run. rdquo ldquoThere is a political event of note. Last week saw the unexpected resignation of John Key as Prime Minister after eight years in office, and following a caucus vote the previous Deputy Prime Minister Bill English takes the reins from today. Mr English has been Finance Minister for the past eight years, and is likely to maintain his relatively conservative approach to fiscal management. But the loss of a fairly popular political leader in the run up to an election does add an additional layer of uncertainty to the outlook. And at the margin, it has raised the odds of a snap election. rdquo ldquoHowever as noted above, NZD/USD is mostly a US story at present. which means we will be watching US events closely for NZD/USD clues during the week ahead. On that score, the highlight event will be the Fed meeting on 14 Dec, with a hike a near certainty (and more than fully priced). The statement should be balanced, rather than hawkish, and officials are unlikely to lift growth or dot plot projections until more details on Trumprsquos tax and infrastructure plans emerge. If the US dollar pauses or pulls back in response to the FOMC announcement, then NZD/USD will rally. rdquo ldquo 3 months: We expect the US dollar to eventually resume its uptrend as the US economy improves further and US interest rates rise further, and the FOMC membership becomes more hawkish. That should eventually cause NZD/USD to decline to 0.70 or lower. rdquo 06:26 USD: Finishing the year on a firm note - BBH Research Team at BBH notes that the US dollar is finishing the year on a firm note as i t rose to a 10-month high against the yen before the weekend while the euro remains within spitting distance of the bottom of its two-year range near 1.05. ldquoOver the past month, dollar pullbacks have been generally shallow and brief. rdquo ldquoThis week39s FOMC meeting is the last big event of the year. The dollar may continue to be well supported ahead of the meeting where a rate hike is fully discounted. The Fed officials may revise up growth and inflation forecasts, and still not take into account the extent of fiscal stimulus that may be delivered. The President-elect39s team has indicated the initial economic focus will be on trade, not taxes or stimulus. rdquo ldquoNevertheless, investors anticipate both fiscal stimulus and a more hawkish configuration at the Federal Reserve. At the same time, the ECB will be expanding its balance sheet by 780 bln euros next year, and the BOJ39s extraordinary monetary policy is set to continue, augmented by modest fiscal stimulus. Also, while many emerging-market central banks have been reducing their Treasury holdings to support their currencies, private sector demand has been strong, with European investor interest reported. Americans appear to be liquidating some of their holdings for foreign bonds. Foreign investors have returned to the Japanese equity market, but it appears to be mostly on a currency-hedged basis. rdquo ldquoWe had anticipated the US Dollar Index to fall to 99.70 and possibly 99.00. It recorded a low a little below 99.45 in the knee-jerk response to what appeared at ECB tapering. It quickly rebounded, and before the weekend was testing a short-term down trendline drawn off the November 24, November 30, and December 5 high. It was found near 101.55 before the weekend and 101.30 at the end of next week. The speed of the Dollar Index 39s recovery means that MACDs and Slow Stochastics have not crossed higher to generate new buy signals, though they may turn early next week. Remember, the 101.80 area is the 61.8 retracement of the decline since from the 121.00 level seen in July 2001.rdquo 06:22 BOJ tapering sees bond buying slow toward 70 trillion yen - BBG Bloomberg carried an article this Monday, noting that the Bank of Japan (BOJ) technically have retained their target for the annual increase in government bond holdings at 80 trillion yen (699 billion), there are signs the buying may come in closer to 70 trillion yen. Data compiled by Bloomberg show, for the year so far, the BOJ bonding buying annualized is 71.7 trillion yen, versus 75.3 trillion over the same period last year. Chief market economist at Nomura Securities Co, quotThe BOJ is not going to need to purchase 80 trillion yen to keep the yield curve under control. At some point in time they are going to drop the language on 80 trillion yen. quot 05:59 Nikkei back in positive territory on YTD basis Japanrsquos Nikkei index is back into the positive territory on year-to-date basis. The amazing turnaround has been single handedly fueled by the drop in the Japanese Yen. The index had dropped from the January high of 18,951 to hit a low of 14,864 in June. During the same time period, Dollar-Yen dropped from 122.00 to 99.00 levels. However, the USD/JPY pair turned higher in the second half of this year. The uptrend gathered pace after Trump victory. The spot is now eyeing 115.00 levels. Consequently, the Nikkei index rose to a fresh 2016 high of 19,281 levels. 05:45 Ten-year Treasury yield rises to highest since June The yield on the benchmark Ten-year treasury yield rose to 2.497, its highest since June 2015 as oil rose to 16-month high on back of the first global oil deal since 2001. At the time of writing, the 10-yr yield traded at least 2.5 basis points higher on the day. Meanwhile, at the short-end of the curve, the 2-year yield rose 1.6 basis points to 1.149. Oil rallied 5 in Asia after the non-OPEC members cut 558K barrels per day. In response, Saudi Arabia it stands ready to cut more than what was agreed on November 30. The resulting risk-on in the markets reduced demand for the treasuries. Furthermore, rally in oil is also likely to push up inflation expectations, which too is supporting the gains in the treasury yields. 05:42 BOJ may soon have to think about tightening for the first time since 2007 - WSJ The Wall Street Journal (WSJ) ran a story over the weekend, noting that Japanese central bank the BOJ may soon have to resort to tightening for the first time since 2007 in wake of higher inflation expectations from the Trumprsquos presidency. One of central bankingrsquos most aggressive easersmdashthe Bank of Japan (BOJ)mdashmay soon have to think about tightening for the first time since 2007. In a Trump-fueled turnaround, the BOJ may have to lift its 10-year government-bond target from the recently set zero Triggered by expectations that his policies would boost U. S. growth, inflation and interest rates So far, that has been good for Japan, where the weaker yen is brightening exporters39 prospects, helping send Tokyo stocks to 11-month highs 05:30 NZD/USD rebounds to 50-DMA, focus shifts to China data dump The NZD/USD pair extends its recovery into mid-Asia, and now looks to take-out 50-DMA barrier located at 0.7146 amid a broadly subdued US dollar and rally in oil prices. NZD/USD supported at daily S1 Currently, the NZD/USD pair trades 0.11 higher at 0.7143, flirting with session tops reached at 0.7146 in the last hour. The Kiwi is on a roll higher, extending its winning streak into a fourth day today, having staged a solid recovery from a dip below 0.70 handle. The NZD/USD pair remains well bid as investors take the yield-advantage amid a better sentiment towards risk assets, in wake of an oil output cut deal struck between the OPEC and non-OPEC producers over the weekend. However, it remains to be seen whether the major can sustain the ongoing bullish run, as focus now shifts towards tomorrowrsquos Chinese data dump and upcoming FOMC interest rates decision, which is expected to have a significant impact on NZD/USD. NZD/USD Levels to consider To the upside, the next resistance is located at 0.7203 (100-DMA), above which it could extend gains to 0.7226 (multi-week high) and from there to 0.7250 (psychological levels). To the downside immediate support might be located at 0.7109 (200-DMA) and from there to at 0.7091 (20-DMA), below which 0.7065 (Dec 5 low) would be tested. 05:16 Moodys on NZ: Half-year economic amp fiscal update for 2016-17 demonstrates strong public finances The US-based ratings agency, Moodyrsquos Investors Service, published its latest report on the Government of New Zealand . titled lsquoGovernment of New Zealand (NZ): Strong Public Finances, Robust Economic Growth Bolster Sovereign Credit Profilersquo on Monday. Key Points from the report: Government forecasts average annual GDP growth of 3.5 over 2017 and 2018, is slightly higher than Moody39s forecast and points to some downside risk to the revenue projections New Zealand will remain among the fastest growing economies in Moody39s Aaa-rated universe The half-year economic and fiscal update (HYEFU) for 2016-2017 demonstrates strong public finances, providing the government with significant financial flexibility to face negative shocks such as the Kaikoura earthquake Moody39s expects policies and reforms that foster economic growth and maintain sound public finances to remain a key focus under a new leadership 05:16 GBP/USD snaps four-day losing streak The GBP/USD pair snapped a four-day losing streak in Asia amid oil-led risk-on action in the markets. The pair ticked higher from the session low of 1.2570 but failed to chew trough offers around 1.26 handle. The British Chamber of Commerce (BCC) lifted 2017 GDP forecast to 1.1 from the previous figure of 1.0. Meanwhile, 2018 GDP forecast was revised lower to 1.4. However, the markets did not take note of the BCC forecasts and remain at the mercy of the oil price action, given the empty economic calendar across the globe. GBP/USD Technical Levels The spot was last seen trading around 1.2580 levels. A break above 1.26 (psychological level hourly 50-MA) would expose the hourly 200-MA level and hourly 100-MA level of 1.2617 and 1.2636 respectively. A violation there could yield re-test of 1.2704 (hourly chart hurdle). On the lower side, breach of Asian session low of 1.2570 would expose support at 1.2548 (Aug 12 low), under which the losses could be extended to 1.25 (zero figure). 05:01 Indicators signaling USD/CAD is oversold While intraday moving averages point at a continued USD/CAD depreciation, the latest momentum readings raise the odds of a minor throwback. USD/CAD appears primed for a pullback, at least towards overhead resistance established by the 50-period simple moving average. Consistent declines locked RSI below the 50 mark for most of the last 3 weeks. More noticeable was the recent sell off which led the oscillator plunge below its 25 level. This showed that market participants are keen on selling. In the context of a prolonged down trend, the 4-hour RSI looks now very heavy on the sell side so it could be prone to a squeeze back higher. However, the risks are but still skewed to the downside. 05:01 USD/JPY retreats from 10-month tops, but keeps 115.00 Having peaked at 10-month highs at Tokyo open, the USD/JPY pair took a breather and came under fresh selling pressure over the last hour amid a minor-correction seen in the US dollar across the board. USD/JPY trades above all major DMAs The dollar-yen pair is seen retracing a part of the intraday rally to new ten-month tops, largely on the back of stalled US treasury yields buying, which triggered a corrective slide in the US dollar against its main peers. Also, the major tracks a minor-retreat in the Japanese stocks, with the Nikkei 225 index now reverting towards daily lows. Calendar-wise, we had the Japanese core machinery data, which came in much stronger-than expected, and therefore, the upbeat Japanese data also could have helped rescue the JPY bulls. However, the retreat remains restricted amid persisting risk-on sentiment, spurred by weekendrsquos OPEC and non-OPEC oil output deal agreement. While expectations of Fed tightening this week also keeps the sentiment buoyed around the USD/JPY pair. The spot is last seen changing hands at 115.25, reversing from 10-month highs of 115.62, down -0.10 on the day. USD/JPY Technical levels to watch The major finds immediate resistance at 115.62 (multi-month high). A break above the last, the major could test 116 (zero figure) and 116.50 (psychological levels) beyond the last. While to the downside, the immediate support is seen at 115 (round number) next at 114.77 (5-DMA) and below that at 114.29 (10-DMA). 04:48 OPEC s global producer pact could signal oil market metamorphosis Platts SampP Global Platts, the leading independent provider of information and benchmark prices for the commodities and energy markets, believes ldquojoint output cut pact highlights a show of strength and unity across global producers that could mark a new era in cooperation aimed at bringing stability back to global oil marketsrdquo. Buoyed by the non-OPEC deal, Saudi Arabia said it could cut below the psychological figure of 10 million barrels per day. Platts says, ldquoSaudi is making it clear to the global market: the kingdom wants the output deal it negotiated with major producing countries to stick, even if it has to cut production more than it already committed to. rdquo 04:45 UKs BCC: UK s current GDP growth rate won t last BBC News The UKrsquos British Chambers of Commerce (BCC) upgraded its 207 growth forecasts for the UK economy, although warned that higher growth prospects are unsustainable in wake of uncertainty over the UK39s EU relationship. ldquoThe business body expects 2.1 GDP growth this year, up from the 1.8 it forecast just three months agordquo ldquoBut uncertainty over the UK39s EU relationship and higher inflation will quotdampen medium term growthquot ldquoIt expects UK GDP to grow 1.1 next year, and 1.4 in 2018rdquo ldquoHowever, its 1.1 forecast for next year would mark the weakest annual rate of growth for the UK since the 2008 financial crisisrdquo 04:38 AUD/USD lifted by Oil deal-driven risk-on The AUD/USD pair staged a solid comeback, after a weaker Asia opening, now taking the rate beyond the mid-point of 0.74 handle amid a risk-friendly market environment, underpinned by weekendrsquos oil output cut deal. AUD/USD recovers to test 10-DMA at 0.7455 Currently, the AUD/USD pair trades 0.11 higher at 0.7456, retracing from session tops placed just ahead of 5-DMA at 0.7464. The overnight rally in oil prices after markets cheered an oil output cut finally reached between the OPEC and non-OPEC producers on Saturday, provided some impetus to the resourced-linked AUD. Moreover, oil deal-induced risk-on trades across the markets also collaborated to the bullish sentiment around the higher-yielding emerging market currency, while the US dollar remains broadly subdued. Further, analysts at Goldman Sachs lifted copper prices forecasts for next year, which also helped the Aussie to take on a minor-recovery from a brief dip to 0.7430 witnessed in the opening trades. However, further upside looks limited as markets turn cautious stepping into the FOMC week, with a 25-bps hike already priced-in by investors. AUD/USD Levels to watch The pair finds the immediate resistance at 0.7505 (Nov 17 high) above which gains could be extended to the next hurdle located 0.7575 (Nov 16 high) and 0.7600 (zero figure). On the flip side, the immediate support located 0.7400 (round number). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7385 (key support) and below that at 0.7366 (Dec 1 low). 04:36 Goldman Sachs upgrades Iron Ore and Copper forecasts Iron ore rally post-Trump victory has caught most investment banks on the wrong side of the trade. The metal now trades around 80 per tonne, which is significantly higher than the most calendar 2017 forecasts. Goldman Sachs has hiked its three-month forecast to 65 per tonne. The investment banker has also revised its copper forecast for three months, six months, and 12 months higher to 5800, 6200 and 5600 respectively. 04:23 Goldman Sachs: OPEC, non-OPEC announced oil cuts smaller than expected Analysts at Goldman Sachs present their afterthoughts after an output cut deal was finally reached between the OPEC and non-OPEC producers over the weekend. Key Headlines via Bloomberg: Announced cuts are smaller than expected Implementation remains uncertain Nevertheless, the agreement removes the uncertainty surrounding participation of non-OPEC nations to OPEC reduction Saudi Arabia will help achieve a normalization of inventories. even if it requires a larger unilateral cut The cuts support the bank39s H1 (2017) WTI price forecast of 55/barrel GS bases this forecast on effective 1m b/d cuts Greater compliance to the 1.6 target is therefore an upside risk to price forecast ldquoBetter compliance than bank expects would initially lead to higher prices -- with full compliance adding 6/bbl to its price forecast. but then there would be a bigger producer responserdquo 04:15 China officials: Target for economic growth next year should be 6.5 The State Information Center, an official think tank affiliated with Chinarsquos National Development and Reform Commission (NDRC), noted its expectations for the Chinese growth targets in an article published in the China Securities Journal. Key Quotes via Reuters: ldquoThe State Information Center says the target for economic growth next year should be 6.5 and exceeding that level is very likelyrdquo quotIn 2017, China39s economic operations will need to intensify efforts to alleviate deep-seated contradictions and structural problemsrdquo 04:14 Further gains in USD contingent on meaningful fiscal stimulus Goldman Sachs The Dollar index has already rallied from 96.00 levels to 102.12 the highest level since 2003 on the back of heightened odds of a steeper Fed rate hike path in 2017. Research team at Goldman Sachs believes the greenback could strengthen further if there is meaningful fiscal stimulus in the US economy, which is already close to full capacity. Goldman sees Trade Weighted Index (TWI) USD to appreciate close to 7 against the majors over the next 12 months. 04:08 NZIER: Forecasters have revised up their NZ growth and inflation forecasts The New Zealand Institute of Economic Research (NZIER) published a forecast from economists for the NZ economy on Monday, with the forecasts for growth and inflation revised upwards. Forecasters have revised up their growth and inflation forecasts Annual inflation is expected to reach the RBNZ39s 2 mid-point target by March 2019 Continued strong migration-led population growth expected to boost household spending and residential construction further over the next few years Businesses are also feeling more confident, and are more optimistic about investment and hiring Underlying trend improvement in employment demand Unemployment rate expected to fall to 4.6 by March 2018 Skills shortages becoming more apparent, thus wage growth has been revised up Forecasts range from 1.7 to 3.2 for the year to March 2020 04:01 USD/NOK hints at dip buying The hourly 50-period SMA broke through the slower 200-period SMA, adding credence to the recent bullish USD/NOK profile. If USD/NOK spot falls closer to the level where the moving averages crossed, then buyers might see it as an opportunity to reenter. Furthermore, a convincing break through the 50 SMA signals a neutral tone, shifting negative below the 200 SMA. 03:57 EUR/USD headed for turmoil on FOMC and 2017 s political outlook EUR/USD is lower again in Asia after another bazooka from the ECB last week in respect to their QE extensions, coupled with concerns over the Italian and European banking crisis that could be the New Year event instead of China this time around, both are supporting the greenback as a safe haven and a bearish outlook for the single currency, as funding currency. Analysts at Rabobank, in their recent report, said in a summary, quotRecent economic data have been in line with the Fed39s expectations. What39s more, markets have responded positively to the outcome of the elections and are pricing in a 100 probability of a December hike. So unless there is a major disruptive event between now and December 14, the FOMC will raise its target range for the federal funds rate to 0.50-0.75.quot Fed December hikes: an annual thing - Rabobank In respect to the ECB, they are committed to their asset purchases programme and the dovish tone of the Draghi has fuelled speculation for parity vrs the dollar. It could be just as well due to the onset of political uncertainties taking fold next year in Euroland. Considering Draghi has extended the QE programme, albeit at a slower pace, he has done so until Dec and 2017 which means there will be plenty of cheap money around to soften the impact of German elections and subsequent volatility in the autumn of 2017. quotOn the assumption that populist parties do not prevail in next spring39s Dutch and French election, we are forecasting EUR/USD at 1.10 on a 12 mth view, quot offered analysts at Rabobank. Meanwhile, spot is currently trading at 1.0551 EUR/USD after a retreat from 1.0875 recently on the ECb decision39s initial spike, before a breakdown through the 1.0620 and the 20 day ma with focus now set on the recent low at 1.0505 and 1.0467, the March low. quotThis remains a major break down point to parity, quot explained analysts at Commerzbank. EUR/USD analysis: Yellen, Trump, and FED39s future up next 03:53 Asian stocks rally on oil deal amp Saudis whatever it takes moment Asian stock markets are having a good time this Monday morning on account of the first global oil deal since 2011 and Saudirsquos readiness to do lsquowhatever it takesrsquo to rebalance the oil markets. Japanrsquos Nikkei gained 1.3 or 247 points to 19,244. The weakness in the Japanese Yen is also driving the stock prices higher. Australiarsquos SampP/ASX 200 rose 0.34 or 18 points to 5580 levels. Oil jumped to its highest level since July 2015 after the non-OPEC producers agreed to cut output by 558K barrels per day. Following the non-OPEC deal, Saudi said it could do more cuts beyond what the level decided on November 30. The data calendar is light across the globe. Hence, oil remains at the center stage of the financial markets. 03:24 Fed December hikes: an annual thing - Rabobank Analysts at Rabobank said that it seems like we can add the Fedrsquos annual hike to the calendar as a recurring event in December. quotThe FOMC launched its hiking cycle in December 2015, promising to hike four times this year, but instead we are heading for another single hike in December. The minutes of the FOMC meeting of November 1-2 confirmed the now widely held view that the Fed will hike in the final month of the year. Members generally agreed that the case for a hike had continued to strengthen. But a majority of members judged that the Committee should, for the time being, await further evidence of progress toward the Fedrsquos objectives. Most participants expressed a view that it could well become appropriate to raise the target range for the federal funds rate relatively soon. Some participants noted that recent Committee communications were consistent with a hike in the near term or argued that to preserve credibility, such an increase should occur at the next meeting. Fed Chair Yellenrsquos testimony to the Joint Economic Committee of Congress on November 17 suggested that the outcome of the elections a week earlier had not changed the mind of the FOMC. Moreover, she stressed that waiting for further evidence did not reflect a lack of confidence in the economy. Rather, with the unemployment rate remaining steady this year despite above - trend job gains, and with inflation continuing to run below its target, the FOMC judged that there was somewhat more room for the labor market to improve on a sustainable basis than the Committee had anticipated at the beginning of the year. With respect to the impact of the election outcome on the Fedrsquos rate path she said that there was still a lot of uncertainty about fiscal policy next year and its inflationary consequences. Since Yellenrsquos testimony, Q3 GDP growth was revised upward to 3.2 from 2.9, while the Atlanta Fedrsquos nowcast for Q4 GDP growth stood at 2.6 on December 6. This is the pickup in growth that the FOMC was looking for in H2, after the disappointing 0.8 in Q1 and 1.4 in Q2. Whatrsquos more, the Employment Report for November showed that nonfarm payroll growth continued at a decent pace of 178K, and unemployment fell to 4.6 from 4.9. Finally, the PCE deflator ndash which is the Fedrsquos preferred measure of inflation ndash rose to 1.4 in October from 1.2 (year-on-year). So the economic data have passed the Fedrsquos three tests for a rate hike: a pickup in GDP growth, continued labor market improvement, and rising inflation. Whatrsquos more, after a very brief risk-off reaction, the financial markets have responded positively to the election of Donald Trump as the next President of the United States. In combination with Republican majorities in the Senate and the House of Representatives, markets are looking forward to a substantial fiscal policy stimulus boosting the economy. The probability of a December hike priced in by the futures markets has risen to 100. So unless there is a major disruptive event between now and December 14, the FOMC will raise its target range for the federal funds rate to 0.50-0.75. It remains to be seen whether the decision to hike will be unanimous. The September dot plot revealed that three participants did not expect to hike at all this year. However, not all participants have voting rights and the recent economic data ndash and the anticipated fiscal stimulus by the new administration ndash could persuade dovish voters. Given the upbeat sentiment in recent weeks, a dissent may not disturb the markets very much. However, if markets have a bad day on December 14, a dissent could make it worse. quot 03:24 Gold drops to lowest since February Gold is feeling the heat of the OPEC and non-OPEC oil output cut deal and the resulting rise in the oil prices. The metal was last seen trading 1155/Oz the lowest since February. Oil spiked more than 5 after the non-OPEC group headed by Russia agreed to cut output by 558K barrels per day. Buoyed the non-OPEC deal, Saudi said it may cut more than what was agreed on November 30. Oil rally is usually good news for the riskier assets. Consequently, investors are moving out of gold in Asia. Gold Technical Levels A break below 1142.97 (Mar 2015 low) would open doors for a sell-off to 1132.08 (Nov 2014 low). On the higher side, violation at the Asian session high of 1159.90 could yield a re-test of 1172.07 (61.8 of Dec 2015 low ndash July 2016 high). 03:16 PBOC sets USD/CNY at 6.9086 vs 6.8972 PBOC sets USD/CNY at 6.9086 vs 6.8972 03:10 USD/CNY fix projection 6.9156 from 6.8972 - Nomura Analysts at nomura offered their model1 projects for the fix. quotOur model1 projects for the fix to be 184 pips higher than the previous fix (6.9156 from 6.8972) and 151 pips higher than the previous official spot USD/CNY close of 6.9005. The basket implied change is 202 pips higher than the previous official spot USD/CNY close (6.9207 from 6.9005). 02:59 Russias Novak cheers global oil deal Russian Energy Ministry Alexander Novak, in an exclusive interview to Bloomberg, cheered the global oil deal and said he is satisfied with the current oil prices. Novak reportedly said on Sunday that oil prices could have dropped to 30-35 per barrel, if OPEC and non-OPEC countries had not struck an output reduction deal. 02:47 AUD/JPY isnt buying the oil surge AUD/JPY, the global risk barometer, is trading sideways despite the rise in oil prices to 16-month highs on the global oil deal. The cross clocked a high of 86.07 and was last seen trading just below 86.00 levels. Fridayrsquos high stands at 86.09. Oil prices spiked after OPEC and non-OPEC producers agreed to cut output for the first time since 2011. Oil rally usually bodes well for the risk assets. However, the lacklustre action in the AUD/JPY cross today could be suggesting otherwise. AUD/JPY Technical Levels A break below 85.73 (session low) would expose the downward sloping weekly 100-MA of 85.50, under which the losses could be extended to 84.33 (weekly 5-MA). On the higher side, acceptance above 86.00 could yield 86.70 (March high) and 87.00 (zero figure). 02:45 USD/JPY: better bid and about to get bidder for the 120 s USD/JPY has been a strong bid in risk-on markets while investors are backing the greenback as we head towards the end of the year and much uncertainty to come in 2017. The greenback is in demand as the world39s reserve currency while the Yen has been printed so much that it has diluted its safe-haven appeal given the weakness in the Japanese economy and divergence between the BoJ and Federal Reserve. Longer-term rate differentials (10Y spreads) continue to widen the yield gap of over 230bps last week represented the biggest yield gap for the USD since 2010. Fed funds futures continued to imply a 100 chance of a rate hike on 14 December, and two more rate hikes priced in for 2017. Fed preview: The second rate hike is coming - Commerzbank Investors are placing their money where they are predicting a better return, and that is the greenback and US stocks while bonds plummet and global yields rise in the face of reflation. Oil prices/demand and the Yen Also, worth noting, is that Japan is the world39s second largest net importer of fossil fuels and oil remains the largest source of primary energy consumption in Japan. The recent accord between non-OPEC members with OPEC members has seen a rally in oil prices at the start of this week that is not helpful to the ailing Japanese economy - a demand driven environment that this could well spark ahead of this week39s FOMC when full markets get going could weigh on the Yen further. Brent oil clocks 16-month high on first global oil pact The market has penetrated through the 115.41 key fibo level and we are in the sixth weekly decline in the Yen and we have penetrated the 200 week sma at 108.92, marching on through Feb 2016 highs and that reveals the 12039s and 2016 high of 121.68. 120.00/120.10 represents the 78.6 retracement of the move down from 2015. Break to the downside, on say the FOMC holding or a sell the fact on a hike could test the 114.80 level and 112.80 as the floor of the early Dec commencing channel support line. 02:22 Brent oil clocks 26-month high on first global oil pact Brent oil jumped to 57.50 itrsquos highest since mid July 2015 after the OPEC and non-OPEC producers on Saturday reached their first output cut deal since 2001. Non-OPEC producers led by Russia agreed to cut the output by 558K barrels per day. The cut is equivalent to the demand growth seen from China and India. Saudirsquos lsquowhatever it takesrsquo moment Buoyed by the non-OPEC deal, Saudi took a page out of ECB President Mario Draghirsquos book by stating it is ready to lsquodo whatever it takesrsquo ndash cut production below the level agreed on November 30hellip Even below the psychological figure of 10 million barrels per day. Consequently, oil benchmarks spiked in early Asia. Energy/Mining shares could rally Oil and Mining stocks across the globe are likely to cheer the first global oil deal since 2001. UKrsquos FTSE 100 may close-in on 7000 levels, while US indices could see another record high closing. Brent Technical Levels Brent was last seen trading around 56.60/barrel. A break above 57.70 (session high) would open doors for 58.55 (mid-Dec 2015 low). A major hurdle above the same is directly seen at 60.00. On the other hand, a breakdown of support at 56.00 (zero figure) could yield a correction to 54.29 (session low), under which a major support is seen directly at 51.80 (weekly 5-MA). 02:05 USD/CAD extends bearish gap as Oil spikes through 54 WTI USD/CAD has been offered on the back of the non-OPEC accord with OPEC members that came to fruition over the weekend. It was a slow reaction in the market, but eventually oil jumped on the back of the pledge to lift the value and prices of oil in a bid to support the economies that have been hit hard by the glut of oil that started over two years ago by the 13 non-OPEC members agreed to cut crude output by 558,000bpd. That volume is in addition to the 1.2 million barrels a day in cuts from OPEC members, and this is amounting to a total of almost 2 of global oil supply - Russia have pledge to cut by 300,000bpd. USD/CAD39s bearish trajectory is intact and has been one-way since late November, observed analysts at Scotiabank, explained that this shows no sign of stopping. quotShort-term trend momentum has strengthened and spot is heading for a test of the broader bull channel trend at 1.3090/00 that comes into focus. quot 02:02 United Kingdom Rightmove House Price Index (MoM) fell from previous -1.1 to -2.1 02:01 United Kingdom Rightmove House Price Index (YoY) declined to 3.4 from previous 4.5 01:55 New Zealand Visitor Arrivals (YoY) fell from previous 14 to 2.2 01:51 Japan Domestic Corporate Goods Price Index (MoM) came in at 0.4, above expectations (0.3) in November 01:51 Japan Domestic Corporate Goods Price Index (YoY) above expectations (-2.3) in November: Actual (-2.2) 01:51 Japan Machinery Orders (MoM) came in at 4.1, above expectations (1) in October 01:40 Oil: what a mover, to highest levels since July 2015 s glut sell-off from 56 Oil is much higher in early Asia on the back of the weekend news with a gap through 52.00 and has reached a high of 54.31 in WTI so far. The 13 non OPEC members agreed to cut crude output by 558,000bpd, of which Russia have pledge to cut by 300,000bpd. This move will be in addition to the 1.2 million barrels a day in cuts from OPEC members, and this is amounting to a total of almost 2 of global oil supply. This accord between OPEC and non-OPEc producing nations is a pact designed to reduce a global oversupply of crude and subsequently lift the value and prices of oil in a bid to support the economies that have been hit hard by the glut of oil that started over two years ago. Across the board, the dollar is mixed, but losing its shine rapidly, especially vrs the oil related bloc such as the pound and the Canadian dollar. We are now at the highest levels in WTI since the summer of 2017 when prices dropped below 56 and plummeted through 51.50 eventually on the oil glut that finally took the price all the way down to 28.93 in February earlier this year. 01:19 NZD/USD: offered below 200 sma on 1hr sticks NZD/USD has continued on the offer in early Asia to start the week ahead of the FOMC as the main event for markets. NZD/USD trades below the 1hr 200-sma at 0.7127 and is testing the downside of the ascending support line from the start of December39s rally at 0.7041. Just today, the front runner, Bill English, was confirmed as Prime Minister after John Key announced his resignation last week. Also, we had net migration for October that came in at 6240, from 6340 in October with wholesale sales 1 for Q3 vrs 1.7 prior seasonally adjusted. Analysts at Westpac explained the US dollar39s extended rise recently has flipped NZD/USD momentum from positive to neutral, in a 0.7000-0.7200 range. NZD/USD 1-3 month: quotThe US dollar has had an impressive rise since the US election and has potential to rise further during the months ahead, not least because the Fed will probably hike in December. Against that, the NZ economy is strong and dairy prices have risen. Overall we are left with a bearish outlook for NZD/USD, targeting sub-0.70,quot - analysts at Westpac offered. 00:41 GBP/USD: finding a bid in the open on a mixed dollar and despite Brexit w/e news GBP/USD has opened on the bid in early Asia while the dollar is mixed across the board - strong vrs the yen, euro and Aussie. Market wrap: US dollar and US rates helped by data - Westpac The pound has opened with a bid from lows of 1.2569 with a high up to test 1.26 the figure. The weekend news hasn39t offered anything significant that can be related to the gaps across the board and mixed outlook, but the pound is robust, despite PM May39s next challenge in respect of Brexit while opponents are launching a fresh legal action to upend her plans for leaving the EU and triggering Article 50 by the end of March 2017. The campaigners will be appealing to the high court in an effort to keep Britain in the single market and give MP39s powers to veto over the terms of which Britain can leave the EU. Other news came with Fitch affirming the UK AA with a negative outlook. Also, 13 non OPEC members agreed to cut output by 558,000bpd, of which Russia have pledge to cut by 300,000bpd - Non-OPEC counties join the cartel in output cut GBP/USD recently failed 1.2778 and close to the 100 day ma. To the downside, there is room to the 1.2424 two month uptrend on a break below 1.2530/50 local support area and a subsequent sell-off below the 1.25 handle. quotThis remains the break down point to the 1.2090/85 October 11 and 25 lows, quot suggested analysts at Commerzbank, adding, quotIntraday rallies are likely to now struggle circa 1.2665.Initial support lies at 1.2302/1.2285.quot 00:10 Prospects of another large economic stimulus package - Nomura Analysts at Nomura explained that the economic stimulus package approved by the Cabinet in August totaled yen28trn, more than had been expected. quotThe reasons for the size of the package were probably the strength of the yen in the first half of 2016 and serious concerns about the impact of Brexit on financial markets and the economy. We expect the economy to begin to slow gradually in FY17 H2 as the impact of existing economic stimulus packages begins to fade. However, with the economy unlikely to slow to below its potential growth rate, we do not expect a large economic stimulus package in FY17.quot quotThat said, in view of the many imponderables, we cannot rule out the possibility that concerns similar to those of this summer may reappear. In our view, such concerns are more likely to be triggered by developments overseas than in Japan. If President-elect Trump39s trade policies turn out to be protectionist, we see a risk that the new administration could favor a weaker dollar and try to pressurize countries with a trade surplus into stimulating domestic demand. Also, we will need to monitor US behavior at G7 and G20 meetings as well as look out for the US Treasury39s Semiannual Report on International Economic and Exchange Rate Policies. Similarly, election victories for protectionist political parties in Europe could trigger the risk-off trade (ie, flows into yen and out of stock markets), which could have a negative knock-on effect on the Japanese economy via its impact on financial markets. If such risks materialized, the likelihood of fiscal expansion would increase. quot Data source: FX Street Disclaimer :This material is provided by FXStreet as a general marketing communication for information purposes only and does not constitute an independent investment research. Nada nesta comunicação contém, ou deve ser considerado como contendo, um conselho de investimento ou uma recomendação de investimento ou uma solicitação com a finalidade de comprar ou vender qualquer instrumento financeiro. Todas as informações fornecidas são coletadas de fontes respeitáveis ​​e qualquer informação contendo uma indicação de desempenho passado não é uma garantia ou um indicador confiável de desempenho futuro. Os utilizadores reconhecem que qualquer investimento em produtos de FX e CFDs é caracterizado por um certo grau de incerteza e que qualquer investimento desta natureza envolve um elevado nível de risco pelo qual os utilizadores são os únicos responsáveis ​​e responsáveis. Não assumimos qualquer responsabilidade por qualquer perda decorrente de qualquer investimento realizado com base nas informações aqui apresentadas. Risk Warning: Trading Binary Options may not be suitable for all investors as it carries a high degree of risk to your capital. Trading such products is risky and you may lose all of your investment. Please read the full Risk DisclosureForex News 18:05 Dot plot: what the Fed really think about the elections - Rabobank Analysts at Rabobank explained that the December 13-14 meeting of the FOMC will not only lead to a rate decision, but also to new rate projections. quotThe previous dot plot, published in September, implied two rate hikes in 2017. Since then, economic data have evolved in line with the Fedrsquos expectations, so that should not be a reason for a major shift in the dot plot. However, some in the FOMC may share the marketrsquos view that the fiscal policy initiatives by the new administration will give a big boost to the economy in 2017. On the other side of the spectrum, some may be concerned about the adverse impact of trade policies on the US economy. While Fed speakers have been careful in their comments on the election outcome, the dot plot will reveal what they really think about the economic consequences. quotWhile we may still see two hikes in the new plot, or more, we remain skeptical of such a scenario. First, the implementation lag of infrastructure spending can be considerable. Finding shovel ready projects can be a challenge. Second, the impact of infrastructure spending on GDP growth may also take time. Note that the 305bn highway bill of December 2015 has yet to have a positive impact on GDP growth. Second, the positive impact of the fiscal impulse may be mitigated by the negative fall-out from Trumprsquos trade policies. Therefore, we expect only one rate hike in 2017, letrsquos say December. If the fiscal policy impulse hits the economy sooner than we expect, and with more impact, the risks to our forecast lie to the upside. In contrast, if the fiscal impulse disappoints in terms of timing and size, or if trade conflicts bring substantial damage to the US economy, the risks lie to the downside. quot 18:00 GBP/USD better bid on a key week ahead, watching FOMC Currently, GBP/USD is trading at 1.2660, up 0.67 on the day, having posted a daily high at 1.2671 and low at 1.2567. GBP/USD has been holding the support line at 1.2550 after a sell-off from 1.2775 area and the peak of its Brexit/ flash-crash recovery. quotWhile GBP has trended higher from its early October low, cable is still 18 weaker than its pre-referendum levels and EUR/GBP is almost 10 higher, quot explained analysts at Rabobank. GBP/USD saw 1.50 just before the referendum results were announced in late June and the low for the year was 1.1840 on the back of the flash crash on October 7. Commerzbank39s EUR/GBP outlook quotWe maintain a negative bias and look for a retest of the recent low at 0.8304 and the 200 day ma at 0.8296.quot However, with the ECB39s dovish rhetoric last week compared to expectations for reflation in the US economy and political uncertainty in the EU, the pound can drift higher vrs the euro, certainly on a soft Brexit story, and it is questionable how much of a rate hike is already priced into the dollar that could be due a correction from its recent highs. The MPC will meet this week, along with the Fed and much will depend on their forward guidance, if any will be given at all if the BoE have no bias either way. In respect to the FOMC, the Fed funds futures continued to imply a 100 chance of a rate hike on 14 December, and two more rate hikes priced in for 2017. Spot is presently trading at 1.2661, and next resistance can be seen at 1.2671 (Daily High), 1.2685 (Daily Classic R3), 1.2720 (Weekly Classic R1), 1.2726 (Weekly High) and 1.2728 (Monthly High). Next support to the downside can be found at 1.2654 (Daily Classic R2), 1.2634 (Weekly Classic PP), 1.2627 (Hourly 100 SMA), 1.2622 (Yesterday39s High) and 1.2619 (Hourly 200 SMA). Commerzbank39s GBP/USD outlook quotWe look for the market to come under increasing downside pressure this week. We look for the market drop to the 1.2434 two month uptrend. This remains the break down point to the 1.2090/85 October 11 and 25 lows. Intraday rallies are likely to now struggle circa 1.2665. Initial support lies at 1.2302/1.2285.quot 17:59 USD/JPY may lose a little altitude near-term below 115.60 - Scotiabank USD/JPY technical picture looks bullish, according to Scotiabank analysts. They noted that a sustained break through the 116 area should see more follow through towards 119/120. ldquoUS/Japan longer-term rate spreads remain influential on USDJPY with US 10 year yields reaching 2.5 and rates likely to move higher still, the market has boosted USDJPY through 115 to the highest spot level since February. rdquo ldquoFridayrsquos IMM data confirmed a significant shift in speculative positioning and sentiment to JPY bearish. The net speculative short yen position revealed in the data was the largest in a year the Fed policy decision and the outlook for rates moving into 2017 will be key in sustaining bearish sentiment. rdquo ldquoUSDJPY short-term technicals: bullishmdashUSDJPY looks toppish on the short-term (hourly) chart and may lose a little altitude nearterm below 115.60 hourly trend support. We think the low 115 area should remain well-supported, however. A sustained break through the 116 area should see more follow through towards 119/120.rdquo 17:47 GBP/USD: Scope for additional near-term gains - BBH According to analysts from Brown Brother Harriman, the next target in the GBP/USD pair could be seen at 1.2775 and they warn that there may be scope to rise to 1.2830 before the end of the year. rdquo ldquoWhile the Federal Reserve meeting is the highlight this week, the UK has a number economic reports and the Bank of England39s Monetary Policy Committee meets. The UK reports inflation tomorrow, followed employment, and then retail sales a few hours before the central bank decision. rdquo ldquoSterling saw 1.50 just before the referendum results were announced in late June. It recorded a low near 1.1840 on the so-called flash crash on October 7. Since then it has gradually climbed higher. The best level since October 7 was recorded on December 6 at 1.2775.rdquo ldquoToday39s low near 1.2545 is the low for December (thus far). There appears to be scope for additional near-term gains. While the 1.2775 is the next target, there may be scope before the end of they year toward 1.2830.rdquo ldquo Even though the Fed will most likely hike rates, we are concerned that many will be disappointed if it does not upgrade its forecasts. We do not think this is particularly realistic, given the official comments and the lack of concrete details from the new Administration. rdquo 17:44 AUD/USD points to further rangebound UOB In opinion of FX Strategists at UOB Group, the near term outlook on AUD/USD signals further consolidation between 0.7350 and 0.7550. ldquoAUD registered a 0.7435/0.7496 range last Friday, rather close to our expected consolidation range of 0.7430/0.7500. From here, 0.7495/00 is acting as a strong resistance and as long as this level is not taken out, a move lower towards 0.7505/10 seems likely (even though as sustained move below this level is not expected)rdquo. ldquo AUD continues to trade mostly sideways and the neutral phase that started late last month is still intact. In other words, expect further range trading between 0.7350 and 0.7550 for nowrdquo. 17:35 US Dollar drops further, tests 101.00 The US Dollar Index ndash which tracks the buck vs. its main rivals ndash met extra selling pressure on Monday and is currently challenging the key 101.00 handle. US Dollar weaker ahead of FOMC The index is reverting two consecutive sessions with gains albeit it still manages to keep the trade above 101.00 the figure. USD is giving away part of the recent advance to the vicinity of 101.80, as market participants have already digested last Fridayrsquos auspicious results from US Consumer Sentiment and cautiousness has started to take over sentiment in light of the imminent FOMC meeting (Wednesday). Consensus among investors have practically priced in a 25 bp rate hike this week, although the Dollar will remain in centre stage as market participants will closely follow the Fedrsquos statement and Yellenrsquos press conference in order to look for any hint of the next steps by the Committee regarding monetary policy. In the meantime, the latest CFTC report showed the upbeat momentum in USD remains well underpinned on the positioning side, as speculative net longs have climbed at the highest level since August 2015 on the week to December 6. US Dollar relevant levels The index is losing 0.37 at 101.22 and a breakdown of 101.06 (20-day sma) would aim for 99.87 (low Dec.5) and finally 99.49 (low Dec.8). On the flip side, the initial hurdle is located at 101.80 (high Dec.5) ahead of 101.88 (high Nov.30) and finally 102.12 (2016 high Nov.24). 17:06 US stocks cautious ahead of the Fed, Dow hits fresh all-time high On the first trading day of the week, major US equity indices opened mixed, with the Dow Jones Industrial Average (DJIA) hitting a fresh all-time high, while both the SampP 500 and Nasdaq struggled to gain traction ahead of the Fed monetary policy decision. Although optimism, led by the weekend oil output deal between OPEC and non-OPEC members, triggered a strong rally in crude oil prices but has failed to lift appetite and provide fresh bullish impetus for other riskier-assets, including equities. At the time of writing DJIA gained over 30-points and rose to 19788, while the broader SampP 500 index was flat-lined around Friday39s closing level near 2,260 level. Meanwhile, tech-heavy Nasdaq Composite index underperformed the broader indices and lost around 15-point to 5,430. Investors now turn their focus to the much awaited two-day FOMC monetary policy meeting . starting Tuesday, and uncertainty around the central bank39s monetary policy stance in 2017 seems to be weighing on investor sentiment. The Fed is widely expected to lift the target range for its Federal-funds rate, for the first time since December 2016, to between 0.5 and 0.75. 16:36 EUR/USD extends strong recovery move beyond 1.0600 handle The EUR/USD pair held on to strong recovery gains above 1.0600 handle and has now reversed all of Friday39s losses recorded in the aftermath of dovish ECB taper. Currently trading around 1.0620-25 region, testing session peak, the spot gained traction on Monday as surging oil prices is expected to help lift the regions inflation and reflate the economy. Adding to this, a modest greenback retracement, as measured by the overall US Dollar Index . is also supportive of the pair39s strong recovery move at the start of a fresh trading week. With an empty US economic docket . market focus would remain on the upcoming FOMC monetary policy decision on Wednesday, where the central bank is widely expected to raise benchmark interest-rates by 25 bps. From technical perspective, the pair has managed to defend and rebound from 1.0530-25 historic support, thus, increasing the possibilities of additional recovery ahead of the Fed announcement on Wednesday. Valeria Bednarik, Chief Analyst at FXStreet, notes, quotin the 1 hour chart, the price is holding now above a modestly bullish 20 SMA, while technical indicators have lost upward strength within positive territory, indicating limited buying interest at current levels. In the 4 hours chart, technical indicators have resumed their declines after a modest upward correction within bearish territory, whilst the intraday advance stalled below the 1.0630 region, where the pair has its 20 and 100 SMAs, level that cap the upside since last Thursday. quot 16:35 GBP/USD accelerates the upside to 1.2670 The Sterling is now picking up further pace in detriment of the greenback, sending GBP/USD to daily tops in the 1.2665/70 band. GBP/USD focus on UK CPI, FOMC The pair has reverted the initial negative mood and is now trading in the upper end of todayrsquos range, gaining nearly a cent since recent lows and reverting at the same time a 4-session negative streak. The renewed offered bias in the buck is allowing the ongoing rebound in the risk-associated space, boosted already by the rally in crude oil prices following the non-OPEC deal clinched over the weekend. Looking ahead, UKrsquos inflation figures (Tuesday) area expected to show consumer prices rose at an annualized 1.1 during November, while Core prices are seen gaining 1.3 over the last twelve months. Across the pond, the most relevant event will be the FOMC meeting on Wednesday, with expectations clearly tilted towards a 25 bp rate hike by the Fed. On the positioning side, GBP speculative shorts have been trimmed to the lowest level since early August, while net shorts have retreated from record levels during the week ended on December 6 and according to the latest CFTC report. GBP/USD levels to consider As of writing the pair is gaining 0.27 at 1.2662 facing the next up barrier at 1.2706 (high Dec.8) followed by 1.2767 (100-day sma) and finally 1.2776 (high Dec.6). On the other hand, a break below 1.2545 (low Dec.9) would expose 1.2530 (20-day sma) and then 1.2462 (55-day sma). 16:33 United Kingdom CB Leading Economic Index remains unchanged at 0.1 in November 16:18 USD/JPY scope for a test of 116.50 UOB In view of Strategists at UOB Group, the pair could extend its upside to the mid-116.00s in the near term. ldquoThe ease of which the major 115.00 resistance was taken out last Friday was unexpected. While indicators are mostly overbought after the sharp rise, the current USD strength appears to have scope to extend further to 116.50 (low in August 2015) even though at this stage, a sustained move above this level seems unlikelyrdquo. ldquoThat said, the current positive undertone is intact unless there is a move back below 114.30rdquo. 16:13 USD/TRY firmer around 3.5000 The Turkish Lira is losing further ground today, sending USD/TRY to test the 3.50 area after climbing as high as the 3.55 region in early trade. USD/TRY off historical tops The pair is extending the rebound from last weekrsquos troughs in sub-3.3400 levels following a pick up in the demand for the greenback and extra downside pressure in TRY following the bomb blasts in Istanbul over the weekend, with 30 dead and more than 160 wounded. In the meantime, TRY seems poised for further pullbacks as geopolitical risks have gathered traction as of late and the Federal Reserve is expected to hike rates at its meeting on Wednesday. In the data space, Turkish GDP figures showed the economy has contracted at an annualized 1.8 during the third quarter, more than the 0.5 drop initially estimated and down from the previous 4.5 gain. Additionally, the Current Account deficit shrunk a tad to 1.67 billion in October. At the moment the pair is up 0.86 at 3.5069 and a break above 3.5494 (high Dec.12) would expose 3.5626 (high Dec.5) and finally 3.5860 (historical high Dec.2). On the other hand, the next support lines up at 3.4902 (low Dec.12) followed by 3.4346 (20-day sma) and then 3.3370 (low Dec.8). 16:09 USD/JPY trims strong gains to 10-month peak After surging through 116.00 handle to hit a 10-month high, the USD/JPY pair witnessed a profit taking slide and has now reversed majority of its daily gains. Currently trading around mid-115.00s, the prevalent cautious sentiment in equity market is seen extending some support to the Japanese Yen39s safe-haven appeal. Moreover, a broad based US Dollar retracement, as investors prepared for Wednesday39s much-awaited Fed monetary policy decision . also seems to be contributing to the pair39s profit taking slide from the highest level since Feb. 8. Investors, this week, will remain focused on the FOMC meeting starting Tuesday and firming expectations of interest rate-hike might continue to underpin the greenback. Adding to this, anticipated faster US economic growth and inflationary pressure, in wake of aggressive fiscal stimulus by Trump administration, has been fueling speculations tighter Fed monetary policy stance in 2017 and might now limit any immediate sharp downslide for the major. Valeria Bednarik, Chief Analyst at FXStreet, notes, quotIn the 4 hours chart, the RSI indicator pulls back from overbought territory, while the Momentum holds flat well into positive territory, supporting the case for a downward correction. This Monday39s low stands at 115.15, the immediate support and the level to break to confirm additional declines towards 114.00, the 23.6 retracement of the 2011/15 rally. quot 16:02 Mexico Industrial Output (YoY) down to -1.4 in October from previous -1.3 16:01 Intraday SMA cross seen on USD/HUF A new leg up in USD/HUF bolstered its 100 hourly SMA to cross above the 200 period one. While this intraday Golden Cross doesnt assure the recent correction is done and dusted, the low prices printed on hourly charts are at a converging distance to the SMA cross. This price level could be used as a technical hotspot by many USD/HUF traders. The risk scenario is set once a close beyond the 200 SMA is printed. 15:36 EUR/USD solid support comes at 1.0505 UOB FX Strategists at UOB Gorup noted the pair remains well supported around recent lows at 1.0505 for the time being. ldquoThe anticipated EUR weakness exceeded our expectation by moving below the 1.0560/65 target to reach 1.0528. With no signs of stabilization just yet, the decline appears to have room to extend lower to test the 1.0500/05 low seen on the day of Italian referendumrdquo. ldquoAs highlighted, the near-term pressure is tilted to the downside but any decline is expected to encounter solid support at the lsquoItalian referendumrsquo low of 1.0505. This level is followed closely by another major support which is the 2015 low of 1.0455/60rdquo. ldquoOverall, EUR is expected to stay under pressure in the coming days unless it can move and stay above 1.0670 (1.0630 is already a strong short-term resistance)rdquo. 15:26 Asia: November FX reserves not so bad after all - BNPP Mirza Baig, Head of FX amp IR Asia Strategy at BNP Paribas, notes that the Asian central banks have reported their FX reserves for November and most have updated their FX forward books for October. ldquoWhile Chinarsquos FX reserves declined slightly more than expected in November, most other countries reported much better figures. rdquo ldquoGiven that net foreign selling of local market assets was substantial, the smaller - than-expected decline in FX reserves suggests foreign investors are in no hurry to repatriate cash. Unlike previous episodes of market mayhem, the bid for USDs appears remarkably subdued. rdquo ldquoWe track reserve changes (adjusted for valuation effects) closely as they are a key indicator of balance of payments dynamics and central banksrsquo FX policies. rdquo ldquoThe standout theme is that reserve depletion was smaller than expected in most cases. Given the pressure on Asian currencies and the large redemptions reported by EM funds, we had expected a substantial drop in FX reserves. rdquo ldquo China: China reported a nominal decrease in reserves of USD 69bn in September, slightly more than the market expectation of a USD 60bn fall. After valuation adjustments, we estimate a decline of USD 25bn. While this confirms that downward pressure on the RMB increased last month, we believe the monthly reported reserves probably understate the authoritiesrsquo true market intervention. In general, due to the lack of transparency on lsquoproxyrsquo intervention and USDCNH FX swap transactions, we do not think that the monthly reserve data are a reliable or relevant indicator anymore. rdquo 15:22 USD/RUB sinks to 61.00, fresh 2016 lows The Russian currency is up more than 2 vs. its American peer at the beginning of the week, dragging USD/RUB to fresh lows in the 61.00 neighbourhood. USD/RUB drops on Brent gains RUB is trading in fresh 2016 tops vs. the greenback around the 61.00 handle, levels last seen in October 2015 in response to a strong rebound in crude oil prices following the non-OPEC deal over the weekend in Vienna. In fact, non-OPEC producers agreed to cut the oil output by nearly 560K bpd starting in January, adding to the already deal clinched by OPEC countries at the meeting in late November, all in order to stabilize the oil market and curb the persistent supply glut. Data wise today, Russian trade surplus came at RUB6.60 billion in October, missing estimates and down from Septemberrsquos RUB7.38 billion. The next big event for the pair will be the FOMC meeting on Wednesday, with consensus pointing to a 25 bp rate hike. USD/RUB levels to watch At the moment the pair is retreating 2.03 at 61.22 facing the next support at 60.97 (2016 low Dec.12) ahead of 60.84 (low Oct.9 2015) and then 58.57 (low Jul.29 2015). On the other hand, a break above 62.49 (high Dec.12) would expose 63.46 (55-day sma) and finally 63.99 (20-day sma). 15:16 USD/CAD off session lows, still well-offered near 1.3150 level After an initial slump to the vicinity of 1.3100 handle, the USD/CAD pair has managed to recovery around 30-pips from session low and is currently trading marginally below mid-1.3100s. Following an agreement between OPEC and non-OPEC over the weekend, to cut their cumulative oil production, surging crude oil prices lifted the commodity-lined currency - Lonnie, dragging the USD/CAD major to its lowest level since Oct. 20. As markets digested the initial reaction to oil production deal, a bullish consolidation in oil prices helped the pair to witness a minor pull-back from nearly two-month lows. Moreover, traders also seemed to position themselves cautiously and might have been inclined to take some profits off their bearish USD bets ahead of the upcoming FOMC decision on Wednesday, where the central bank is widely expected to raise interest rates by 25 bps. In absence of any major market moving releases, either from Canada or the US, the prevalent bullish sentiment surrounding oil prices might continue to lend support to the Canadian Dollar39s strong bid tone and might restrict any sharp recovery for the major. Technical levels to watch From current levels, weakness below 1.3110 level (session low) is likely to drag the pair towards testing the very important 200-day SMA support near 1.3075 region below which a fresh leg of weakness would open room for further near-term depreciating move for the pair. On the upside, sustained recovery momentum above 1.3150 immediate hurdle is likely to lift the pair towards 1.3175 ahead of 100-day SMA resistance near 1.3195-1.3200 region. 14:45 Gold struggling to register any meaningful recovery from multi-month lows Despite of a broad based greenback retracement, Gold maintained its offered tone for the third consecutive session and remained closer to over 10-month lows touched during early Asian session on Monday. Currently hovering around 1156 region, the precious metal failed to extract any support from weaker US Dollar . which tends to boost demand for dollar-denominated commodities - like gold. Moreover, cautious sentiment prevalent around the European equity markets has also failed to benefit the yellow metal39s safe-haven investment appeal. The metal39s inability to register any meaningful recovery, despite of some support from couple of intrinsic, clearly reveals investors39 reluctance to carry any bullish bets in anticipation of an interest rate hike at this week39s FOMC meeting . ending on Wednesday. With the near-term trajectory still dependent on the US Dollar, hints towards a faster pace of reversal of the Fed39s easy monetary policy would help the greenback to continue with its recent up-surge and eventually trigger a fresh leg of sell-off in gold. Technical levels to watch Recovery momentum above 1160 immediate resistance is likely to trigger a short-covering bounce towards 1169-70 resistance area ahead of 1175 strong hurdle. On the flip side, multi-month lows near 1151 level is likely to act as immediate support, which if broken is likely to continue dragging the metal further towards its next support near 1140 region. 14:43 GBP: Reiterating medium-term upside BNPP Sam Lynton-Brown, FX Strategist at BNP Paribas, notes that the Sterling has been the best performing currency since the start of November, supported by: the Bank of England moving from an easing to a neutral bias, the UK High Court ruling that parliament has to approve the invocation of Article 50 to leave the EU, and ndash linked to the previous point ndash the governmentrsquos EU negotiation stance seemingly becoming less geared towards a lsquohard Brexitrsquo. ldquoAnother supportive factor for the GBP is the apparent breakdown of the correlation between reserve depletion and GBP selling. Many market commentators suggest that EM reserve depletion requires the automatic selling of reserve currencies. In 2015, the periods of elevated EM reserve depletion corresponded with GBPUSD consistently and significantly undershooting its fair value implied by rates, equities and commodities. rdquo ldquoHowever, since the US election, despite expected EM reserve depletion, the relationship with GBPUSD has broken down. This suggests reserve managers do not want to significantly reduce further their GBP holdings, consistent with our structural fair-value model BNP Paribas FEER, highlighting that GBPUSD is extremely cheap from a long-term fair value perspective. rdquo 14:30 Risk-reward attractive for CAD shorts BNPP Daniel Katzive, Head of FX Strategy at BNP Paribas, favours positioning for USDCAD gains from current levels as a retreat in crude, widening rate differentials and a potential turn for the worse in the risk environment are all potential catalysts for a CAD retreat. ldquoWe recommend buying a 3-month 1.34/1.36 call spread. We offer the following arguments in favour of adding to short CAD exposure at this time: 1) Oil is at the top of its range . Crude prices have gained in the aftermath of the November 30 OPEC deal, with front-month WTI prices above USD 50/bbl. Our commodity strategists believe current levels are unlikely to be sustained as WTI levels above USD 50/bbl will invite North American producer hedging and production, which will threaten needed market rebalancing and inventory reduction. We continue to forecast a retreat towards USD 45/bbl in the weeks ahead, which would be consistent with a higher level of USDCAD. 2) Rate differentials . The Bank of Canada has signalled its policy outlook is set to diverge further from that of the Fed. Our economists expect an easing in January, but even steady Bank of Canada policy would allow front-end rate differentials to continue to move against the CAD. 3) Positioning . Our BNP Paribas positioning framework signals the market has turned long the CAD for the first time since Q2 2016. Long CAD positions could be vulnerable to a retreat in crude prices and/or a turn for the worse in the risk environment as markets shift to focus on US fiscal policy implementation risks and trade policy uncertainties. rdquo 14:23 USD to work its way back toward JPY120 - BBH Dollar is running higher against the yen and has risen in seven of the past nine weeks notes Research Team at BBH. ldquoIt began with an eight-day advance in late September and early October, well before the US election. After carving out a base in the summer around JPY100, the dollar has rallied strongly. Since the middle of September, the yen has fallen nearly 12 against the dollar. The greenback has retraced a little more than 60 of the decline since peaking in June 2015 near JPY126. In the coming months, we expect the dollar to works its way back toward JPY120.rdquo ldquoSince the middle of September foreign investors have returned to the Japanese stock market. In the last 10 weeks, foreign investors bought an average of JPY258 bln of Japanese equities per week. In these ten weeks, all bought one saw net foreign buying. The average over the previous 10 weeks was a net sale of JPY249 bln over which time foreigner were net buyers in two of the weeks. The Topix has rallied about 13 over the period. Note that the modest gain today put the Nikkei up YTD for first time. rdquo ldquoJapan reports the Tankan Survey this week. There is good reason to be optimistic of the Japanese economy in the near-term. Growth in this quarter is off to a better start than the previous quarter. There will be an increase of fiscal stimulus next year. Higher oil prices will aid efforts to arrest lingering deflation pressures. While the US President-elect appears to have ruled out TPP, much to Japan39s dismay, his more confrontational approach to China and quotAmerican Firstquot plays well for Abe, who continues to expand Japan39s military capacity. rdquo 14:20 USDJPY to rise to 128 by the end of 2017 and 135 by the end of 2018 - BNPP Steven Saywell, Global Head of FX Strategy at BNP Paribas, suggests that their year-end forecast for USDJPY stands at 128 ndash the highest amongst forecasting banks according to the latest Bloomberg consensus. ldquoWe are committed to this above-consensus forecast and think a long USDJPY position represents the top FX trade idea for 2017. We initiate a 1 Year USDJPY RKO: Strike 121.50 with KO 132.50 for a cost of 38bp (spot ref: 113.40).rdquo ldquoOur expectations for USDJPY to reach 128 is driven largely by developments in the US, particularly the anticipated rise in US yields as markets continue to price for increased Federal Reserve rate hikes. Our colleagues in rates strategy predict a further rise in US 2y sovereign bond yields in 2017 to 190bp from the current level of 110bp. We expect no significant response from Japanese monetary policy, which will likely continue to focus on maintaining 10y JGB yields at zero. In contrast, we think the ECB will start to reduce its purchases of bonds under the current quantitative easing (QE) programme during 2017 and will exit completely by H1 2018. The greatest central bank policy divergence will therefore be between the US and Japan, driving up USDJPY considerably. rdquo ldquoOur medium-term FX forecasting model, BNP Paribas CLEERtrade, signals that USDJPYrsquos current valuation of 123 will rise to 131 at end 2017 and further to 136 by end 2018. During H2 2016, USDJPY appeared undervalued relative to its CLEER valuation for the first time since September 2012. The primary driver of CLEERrsquos bullish USDJPY projection is the divergence in relative rates (2y swap rate differentials between the US and Japan). CLEER indicates that the interest rate differential in isolation would increase the fair value of USDJPY by 10 between December 2016 and December 2018. Expected CPI changes, particularly the increase in US inflation following President-elect Trumprsquos planned fiscal expansion, should mitigate the relative rates divergence somewhat. rdquo 14:15 EUR/USD firmer, sticks to gains around 1.0600 The resumption of the offered bias around the greenback has prompted EUR/USD to retake the 1.0600 barrier and beyond. EUR/USD cautious ahead of FOMC The pair has managed to regain some buying interest following the recent ECB-led drop to the 1.0530 region, although the upcoming FOMC meeting prompts cautiousness in light of the most likely rate hike on Wednesday. Market consensus has practically priced in a 25 bp rate hike in the Fed Funds, although the centre of attention will be on the potential future steps by the Fed regarding further tightening during the next year, all amidst the underlying constructive stance around the buck. From the positioning perspective, EUR speculative net shorts have been trimmed to the lowest level since mid-October during the week ended on December 6. EUR/USD levels to watch The pair is now up 0.39 at 1.0597 facing the next resistance at 1.0629 (20-day sma) followed by 1.0798 (high Dec.5) and finally 1.0873 (spike post-ECB Dec.8). On the flip side, a breakdown of 1.0515 (low Nov.24) would target 1.0503 (2016 low Dec.5) en route to 1.0457 (2015 low Mar.16). 14:14 Italy remains a source of tension - BBH Italy remains a source of tension, but its problems remain localized according to the Research Team at BBH. ldquoWe do not see the rejection of the referendum as part of the Brexit-US election axis, and the 40 that voted for the referendum is a sufficient block to elect the next Prime Minister. We would suggest the local elections earlier this year, in which the Five-Star Movement won in Rome and Turin, is a more revealing sign of its ascendancy. rdquo ldquoItaly39s foreign minister Gentiloni will replace Renzi as Prime Minister provided he can put together a government that can win a confidence vote. A broad coalition government needs to be in place by the middle of the week, to allow Gentiloni to represent Italy at the EU Summit that begins Thursday. Gentiloni is the fourth unelected Italian Prime Minister. For now, Italian asset are doing fine with Gentiloni forming a caretaker government. rdquo ldquoThere are three main tasks for the caretaker government: prepare for elections, make the necessary decisions to address the simmering banking crisis, and continue reconstruction of the areas devastated by the recent earthquakes. An election before the Dutch election in March seems optimistic, but still the table is set for quite a political spring in Europe (Holland, Italy and France, UK likely triggering Article 50, before German elections in the fall).rdquo ldquoThe Italian premium over Germany has been trending higher all year. It began below 100 bp and is now at 167 bp, having been a little above 185 bp in late November. Italy39s 10-year bond yield is up 45 bp this year. Spain39s is off 25 bp. However, Italy can still borrow money at negative interest rates going out two years. The current minus nine basis points compares with positive ten basis points in late November. The Italian bank stock index fell 2.25 before the weekend, but it still closed higher on the 12.75 on the week and 18 over the past two weeks. Perhaps, if necessary, the interregnum government can take the unpleasant step of seeking ESM support, which could otherwise tarnish Renzi39s comeback. rdquo ldquoRenzi (not Grillo, the head of the 5-Star Movement) is likely the odds-on favorite of the next election at this juncture. The Constitutional review of the new electoral law for the lower chamber after the former law was disallowed will take place in late January. If the new electoral law is rejected by the Court on grounds that giving a bonus to the largest party is not consistent with representative government, it would further bolster Renzi insofar as it favors coalition building, and this is a critical weakness for the Five-Star Movement. rdquo 14:13 GBP/USD extends recovery momentum further beyond 1.2600 handle After an initial dip to session low near 1.2565 region, the GBP/USD pair reversed sharply and jumped to a fresh session peak, snapping four days of losing streak. Currently trading around 1.2640 region, the pair was seen building on to its momentum back above 1.2600 handle amid broad based US Dollar retracement. In absence of any fresh economic releases, the current pull-back from session low could be attributed to short-covering once the pair sustained its recovery back above 1.2600 handle. Moreover, investors seemed to readjust their positions ahead of this week39s central bank monetary policy decisions, FOMC on Wednesday and BOE on Thursday, which would determine the pair39s next leg of directional move. In the meantime, traders will look forward to Tuesday39s Chinese macro data and UK economic docket featuring the release of inflation data for the month of November for short-term trading opportunities. Valeria Bednarik, Chief Analyst at FXStreet, notes, quotTechnically, the pair is stuck around the 50 retracement of its latest daily advance at 1.2575, and in the 4 hours chart, unable to advance beyond a bearish 20 SMA, whilst technical indicator have turned modestly lower within negative territory, supporting some additional slides for this Monday, particularly on a break below 1.2550, the immediate short term support. Below it, 1.2500 is the next bearish target, en route to 1.2470, a daily ascendant trend line coming from December low. quot quotThe upside remains capped by selling interest in the 1.2610/20 region, with gains beyond 1.2630, the 38.2 retracement of the mentioned advance required to revert the intraday negative tone and see the pair advancing up to 1.2650/70.quot 14:09 Fed: 25bp rate hike is fully priced - BNPP Focus now shifts to the FOMC meeting on Wednesday (14 December) and a 25bp rate hike is fully priced by markets, and markets are also close to fully pricing two hikes next year explains Research Team at BNP Paribas. ldquoWith the Fed likely to be cautious about over-committing to further tightening in its communication, we see little scope for this weekrsquos meeting to boost the USD further in the short term. However, anticipation of further tightening should guide US rates and the USD higher as we move through 2017.rdquo ldquoWe think USDJPY will continue to outperform, as monetary policy divergence between the US and Japan will be particularly strong if the Federal Reserve hikes rates and the Bank of Japan maintains its yield curve targeting policy as we expect. We target USDJPY to reach 128 by the end of 2017.rdquo 14:01 Oil: Real challenge is the implementation of the oil agreement - BBH Research Team at BBH suggests that although an agreement within OPEC and also between OPEC and non-OPEC producers was struck, the real challenge is the enforcement, as no such mechanism exists. ldquoWhile everyone is well aware of that, our point is that sequence is important and it is too early to worry about violations. rdquo ldquoLike many, we seem to have underestimated the Saudi39s resolve. Shortly after securing an agreement from non-OPEC members to cut output, Saudi Arabia indicated it was prepared to cut output more than agreed last week. It suggested it would cut output below the psychologically important 10 mln bpd threshold. Not only is OPEC not dead, but Saudi Arabia39s leadership is significant. Although non-OPEC members will cut 558k barrels, less than the 600k asked for, it is still the most ever. It is also impressive, that despite Kazakhstanrsquos new large oil field coming on line, it also participated by a small cut (20k bpd).rdquo ldquoThe optics are good and this will likely lift oil prices further. Over the coming months, we suspect there is scope for oil to rise to 57-65 a barrel basis on the January futures contract. That said, the closer one examines the details, the less impressive it looks. Consider Russia will account for 300k bpd reduction, more than half of the non-OPEC contribution. Russia had boosted its output in recent months as an agreement was distinct, even if unlikely, possibility. There was a post-Soviet Union record 11.247 mln bpd in October. It says that it will cut 200k barrels by March and another 100k bpd in six months. rdquo ldquoSaudi Arabia39s agreement with OPEC should bring its output back to its average earlier this year. Several other countries, including Mexico, are simply formalizing a natural decline. Important non-OPEC producers, including those in the US, Canada, and Brazil will be the beneficiaries, as free-riders. US capacity, especially the shale component, is very flexible and there are reports of that many wells have been drilled, but the wells have been capped. Consider it a free natural underground storage facility. rdquo ldquoAlso, recall that important technological advances have been made over the past two and half years (yes, Professor Gordon, the innovations are not as significant as the internal combustion engine) that lowers the cost of getting that marginal barrel of shale. Assuming that some US producers are skeptical of the implementation of the oil agreement, there may be incentives to boost output quickly to take maximum advantage of what could be a small window of opportunity. rdquo 13:56 US: The danger of the consensus view Danske Bank Thomas Harr, Global Head of FICC Research at Danske Bank, notes that since the Donald Trump US presidential election victory, a strong consensus has formed that the USD will strengthen substantially and that US rates will head a lot higher. ldquoThe story goes that Trump-led fiscal stimulus will drive a higher US neutral rate and a stronger USD ndash much like during the first Ronald Reagan administration in 1981-84.rdquo ldquoNear term, we agree ndash rising US growth expectations will drive a stronger USD and higher global rates. The US economy was already gaining speed before the Trump victory. Over the past few weeks, euro area October retail sales, Germany factory orders and China PMI Manufacturing have all surprised substantially on the upside, suggesting that the US-led recovery is spreading to Europe. However, for us, the view of a stronger USD is a short-term one and there is a high risk that the push higher in global yields will lose steam. rdquo ldquoFor a start, there is a lot of uncertainty about the type of US fiscal stimulus and how quickly it will filter through to the economy. For example, the infrastructure spending that Trump has been advocating will not be financed by the federal government but rather by a lsquodeficit-neutral system of infrastructure creditsrsquo. There is no guarantee that Congress will agree to the tax credits or that business will respond as intended. In addition, Trumprsquos tax cuts will tend to benefit the lsquobetter offrsquo, who have a lower propensity to consume and hence a lower fiscal multiplier. Finally, the output gap in the US is largely closed, which suggests that fiscal stimulus will be more inflationary than growth boosting and there may be a negative growth impact beyond a year. rdquo 13:48 Fed: Key to investors reaction will be a function of the statement and forecasts - BBH Research Team at BBH suggests that provided that the Federal Reserve delivers the widely tipped and expected 25 bp hike in the Fed funds target range, the key to investors39 reaction will be a function of the FOMC statement and forecasts. ldquoA failure of the Federal Reserve to raise interest rates would be a significant shock and likely spur a dollar sell-off, a Treasury rally, and probably an equity market sell-off. A probabilidade deste cenário é tão baixa que não vale muito tempo discutindo. Similarly, a 50 bp move also is highly unlikely. Isso iria contra tudo o que o Fed tem dito sobre movimentos graduais. It would be an admission of getting behind the curve, and there is no evidence that this is their assessment. rdquo ldquoThere seems to be a broad sense that near midyear, there will likely be some tax cuts and spending increases alongside a tougher, perhaps more mercantilist trade policy. The details are vague, and how this sits with the fiscally conservative wing of the Republican Party is not clear. While the intentions and signals of the President-elect have spurred a sizable reaction in the capital markets, more concrete details are needed to begin contemplating the impact on monetary policy. rdquo ldquoTherefore (and this is where some investors may be disappointed), the FOMC39s economic assessment and most importantly, their forecasts, are unlikely to change very much. Of course, the part of the statement that updates the economic assessment may be upgraded a notch. The headwinds that held the economy below trend appear to be transitory as the Fed had anticipated. Fourth quarter growth looks to be around 2.5. Consumption may be a little less robust and trade is looking like a drag. rdquo ldquoAll else being equal, the appreciation of the dollar and rise in yields would likely have a dampening impact on growth and inflation forecasts. This may be blunted by the further decline in the unemployment and underemployment rates and the wealth effect. And given the uncertainties over the new Administration, most Fed officials are likely to be reluctant to change their forecasts much now, when in three months, visibility will be better. rdquo ldquoSpecifically, we expect the median dot show expectations for two hikes next year. While this is twice as fast as the pace in 2015 and 2016, it fits any definition of prudent and cautious. A recent Wall Street Journal survey found that among economists three rate hikes are thought likely next year. rdquo ldquoIn her press conference, Yellen will likely deflect any discussion of the new Administration39s policies. However, she can be counted to offer a vigorous defense of the Fed39s independence against encroachments. Given two current vacancies, the expiration of several governor terms in 2018, the new Administration will have the opportunity to change the Federal Reserve significantly without going through the politically and economically sensitive course of direct confrontation. rdquo 13:38 EUR/JPY reverses ECB-led slide, fast approaching 123.00 handle The EUR/JPY cross maintained strong bid tone for the second consecutive session and has now moved within striking distance of 123.00 handle. Currently trading around 122.90 region, the cross is benefiting from a sharp recovery staged by the shared currency as investors digested last week39s dovish ECB tapering. Adding to this, the prevalent risk-on mood, in wake of weekend oil output deal between OPEC amp non-OPEC member, is further weighing on the Japanese Yen39s safe-haven demand and providing an additional boost to the pair39s strong up-move on the first trading day of the week. Looking at the broader picture, last week39s price-action could be categorized as consolidation phase following Monday39s sharp recovery from the very important 200-day SMA touched in the aftermath of a 39NO39 vote to Italian referendum. Hence, sustained momentum back 123.00 handle would reaffirm continuation of the pair39s upward trajectory in the near-term. Technical levels to watch Momentum above 123.00 handle now seems to get extended beyond last week39s multi-month peak resistance near 123.35 region, towards its next hurdle near 123.75 region. On the downside, 122.00 round figure mark now becomes immediate strong support to defend, which if broken is likely to accelerate the slide towards 121.25 intermediate support before the cross eventually aims towards testing its next major support near 120.15-10 region. 13:31 WTI off highs, back below 54.00 After hitting fresh peaks in levels last seen in July 2015 in the mid-54.00s, the barrel of West Texas Intermediate has now receded to the 53.80 region, still up by more than 4. WTI boosted by non-OPEC deal The recent upside momentum in crude oil prices has been boosted further following the deal between 11 non-OPEC producers to reduce the output by nearly 560K bpd. The deal adds to the previous agreement clinched between OPEC countries on November 30, by which producers will cut the output by 1.2 mbpd to 32.5 mbpd starting in January, all in order to stabilize the oil market and spur prices from previous depressed levels. Later in the week, the usual reports on inventories by the API (Tuesday) and the EIA (Wednesday) are due, although the focus of attention will remain on the buck and the FOMC meeting on Wednesday, with consensus expecting the Fed to hike the Fed Funds rates by 25 bp. On the positioning front, WTI speculative net longs have climbed to the highest level since October 25 during the week ended on December 6 and according to the latest CFTC report. WTI levels to consider At the moment the barrel of WTI is gaining 4.21 at 53.67 and a breakout of 54.50 (2016 high Dec.12) would aim for 62.58 (high May 6 2015). On the other hand, the immediate support lines up at 52.59 (low Dec.12) followed by 51.66 (high Dec.9) and finally 49.61 (low Dec.8). 13:09 Bonds: Onward and upward BNPP Laurence Mutkin, Global Head of G10 Rates Strategy at BNP Paribas, lists down the two reasons that global bond yields have continued the upward march they began in the summer, notwithstanding risk events which have surprised markets (most recently the Italian referendum and the ECBrsquos new QE recipe). ldquoFirst, inflation breakevens remain well below their historic averages even though ldquothe risk of deflation has largely disappearedrdquo, as ECB President Draghi put it at the December ECB press conference. rdquo ldquoSecond, term premium remains extremely low, even at the front end of yield curves: we expect that after Decemberrsquos FOMC, US term premium will continue to rise to reflect the prospect for higher growth, inflation and bond supply over the next couple of years. rdquo ldquoAs far as the Eurozone is concerned, our economistsrsquo call regarding a change in PSPP parameters and extension proved right. On the expected three implications of todayrsquos ECB announcement: i. e. steeper curves, tighter long-dated ASW and higher long term rates, the first two have occurred already. For the third one, we believe that the relative stability of Bund yields will prove temporary as real yields will have to adjust higher. rdquo ldquoHence ndash notwithstanding the pace of the sell-off ndash we maintain our recommendations to be short duration in the US and to have curve steepeners in the euro area, Japan, the UK and Australia. At present market levels, risks around the outlook for interest rates and inflation remain asymmetrically tilted to the upside. rdquo 13:03 Markets: Play certainties, manage uncertainties - Natixis Research Team at Natixis notes that the US elections and the quotnoquot at the Italian referendum did not trigger the expected shocks (with the noteworthy exception of EM and gold), as the markets have visibly chosen to focus only on the good news pending future politico-economic developments. ldquoIt is, ultimately, fundamental trends (inflation, increase in interest rates) that to a large extent have driven investors. This is likely to remain the case over the coming weeks, but we should now expect a higher risk regime. Our risk perception index has entered the intermediate regime after a little more than three months in the low regime. rdquo ldquoWhile we remain positive on equities and on corporate High Yield, but we downgrade EM local debt. As for intra-class arbitrages, we have turned positive on Japanese equities and maintained our views on the other regions. The hierarchy of views on sovereign has remained unchanged, with underweighting of USD and GBP. We have, lastly, turned tactically neutral on industrial and precious metals because of the ferocity of their recent move. rdquo 13:03 AUD/JPY overextended but making higher highs AUD/JPY has been building up a bearish case of late, and traders may be looking to take some profit off the table. On a 4-hour chart, the 50-period is well distanced above the 200-period SMA and the Relative Strength Index has been, on average, above the 50 mark over the last three weeks. The recent attack on highs, coupled with the acceleration of the rally has caused this indicator to enter the overbought zone above 75. This is a less frequent event in this time frame and is often associated with 5th waves. AUD/JPY spot would have to gravitate towards the 50 SMA at a minimum to alleviate immediate upside pressures. 13:02 Upside vulnerability in USD/RUB From an hourly perspective, the USD/RUB has reached its lowest momentum reading of the last 20 days of trading. Moreover, the recent plummeting USD/RUB price action has been highlighted by an above-average reading in the MACD histogram. While these momentum extremes could migrate to higher time frames, the latest hourly MACD print shows dissipation of speed, thus communicating risks of a immediate upside vulnerability. 13:01 European stocks turn negative, Italys banking woes weigh The European stocks opened Monday on a mixed note, with the energy and resource stocks lifted amid persistent rally in oil prices, in wake of the global oil output cut deal reached during the weekend. However, the sentiment quickly soured as the uncertainty around the rescue plan for worldrsquos oldest bank, Monte dei Paschi, weighed heavily on the investorsrsquo sentiment. On Friday, the ECB rejected bailout extension for Paschi, after the bank failed the Europe-wide stress tests over the summer. Moreover, the retreat in the European equities from eleven-months peaks can be also attributed to increased cautiousness in the markets, as focus turns towards the FOMC meeting starting tomorrow, with the final verdict on the US interest rates due out on Wednesday. According to the CME FedWatch tool, markets are currently pricing in a 94.9 chance of a rate hike. Meanwhile, Germany39s DAX 30 index drops -0.26 to 11,175 levels, while the UK39s FTSE 100 index trades -0.25 lower at 6,940. Among the other indices, the French CAC 40 index trades muted around 4,765 while the pan-European Euro Stoxx 50 index trades modestly flat at 3,200 points. 12:58 ECB wasted an opportunity to prepare the market for the inevitable - Commerzbank In view of the Christoph Rieger, Head of Rates amp Credit Research at Commerzbank, the ECB wasted an opportunity in its latest meet to prepare the market for the inevitable. ldquoAs the market ought to realise that important legal constraints were indeed strengthened and look set to bite in early 2018, peripherals are exposed with Portugal first in line. Moreover, we argue that the package is a curve steepener and swap spread widener with the Greek ESM deal having potential to add to the ultra-long steepening. rdquo ldquoDraghi has bought time with his latest set of measures, but the new technical euroQE framework cannot hide the fact that smooth implementation will remain a key issue. Steady aggregate QE volumes mask the major shifts and already rising tensions beneath the surface as shortfalls in smaller countries including Portugal continue to deepen. Although the seasonal slow-down into year-end will provide relief, these frictions will extend with latest technical adjustments leaving the underlying drivers untouched. rdquo 12:52 ECB: A long, slow, disguised and clever taper Deutsche Bank Mario Draghi was at pains to stress that the slowing in the pace of QE to EUR60bn per month this was not the announcement of tapering as noted by the Research Team at Deutsche Bank. ldquoDraghi emphasized the longer-than-consensus 9-month extension of the QE programme and the commitment to more if necessary. Preserving the extraordinary degree of policy accommodative and lengthening the period of the ECBrsquos presence in the market was the overarching narrative the ECB wants to be taken from the announcements. rdquo ldquoOur interpretation is that this is a long, slow, disguised and clever taper. There has been an underlying improvement in the macro picture and the size of QE has been adjusted because the deflation risks foreseen in March have subsided. But the recovery remains uncertain and the ECB needs ensure a taper tantrum does not stub it out. Hence the longer QE and asymmetric commitment to doing more if necessary is valuable insurance. rdquo ldquoThe commitment to doing more is valuable insurance against a deterioration in financial conditions should, for example, this materialize in response to political events. Without the deceleration in purchases, Draghi might not have had the support to make this backstop commitment so clear. rdquo ldquoAssuming downside risks, political or otherwise, do not materialise, in September 2017 the ECB will face its next ldquoextend or taperrdquo decision. On the basis of the latest staff core inflation forecasts, our three core inflation rules to justify tapering will be satisfied at that point in time. Assuming the ECBrsquos above-consensus view on growth holds, the decision next September will be to either taper or make another step-wise adjustment to QE. The difference is just semantics. A long, slow tapering has begun. rdquo ldquoWe are more cautious on growth in 2017. Nevertheless, as the political calendar thins in H2rsquo17, the outlook for growth into 2018 ought to be rising. A further reduction in QE ndash or tapering ndash is probable around end-2017.rdquo 12:48 EUR: Hawkish message contained in the ECBs policy announcement - Rabobank Jane Foley, Research Analyst at Rabobank, suggests that Draghirsquos dovish tone and extension of the ECBrsquos bond buying programme until the end of next year managed to counter much of the disappointment that the ECB will from March reduce the amount of the monthly bond purchases, Rabobank would still argue that there is a hawkish message contained in the ECBrsquos policy announcement. ldquoIf the ECB had continued to buy assets at a pace of EUR80 bln until next September, any reduction in the pace would have been postponed until at least October. As it stands the reduction in the pace of asset purchases will commence next April. rdquo ldquoIrrespective of the debate about whether or not the ECB has tapered, Draghi was ultimately successful in making sure that the market has been made aware that the ECB will be heavily involved in asset purchases at least to the end of last year. Interestingly the extension of policy until December means that the ECB may not need to make another meaningful policy decision until after the German election next autumn. This provides a signal to the market that there should be plentiful cheap money to soften the impact of political uncertainty throughout next yearrsquos heavy election schedule. Political events threaten to increase market volatility next year, but ECB activity should provide some comfort. rdquo ldquoAs the dust settle over the debate about what constitutes a tapering, attention is set to turn its attention towards this weekrsquos Fed meeting. Futures suggest that the market is 100 confident of a Fed move. So, with a 25bps rate hike priced in, the market is likely to take its direction from the guidance offered by Fed Chair Yellen rather than from the policy announcement. On the back of the Trump Presidential election victory, hopes for reflation in the US have seen a significant boost. However, we would expect Yellen to be anxious to avoid a repeat of the H2 2014 scenario when heightened expectations of Fed rate hikes in 2015 led to a significant surge in the value of the USD - which ultimately reduced the need for policy tightening. Another factor which could restrain Yellenrsquos optimism is the confined nature of US wage inflation. rdquo ldquoLast release of US November Labour data produced a disappointing -0.1 m/m outcome for hourly earnings. Meanwhile, hours worked have not made much progress since 2013 and real household income growth has been soft for decades for all but the highest paid. This backdrop suggests that demand growth is still likely to be confined. It is our forecast that once again the Fed may only hike rates once in 2017. This could disappoint current market expectations and led to an unwinding of some of the recently created USD long positions. On the assumption that populist parties do not prevail in next springrsquos Dutch and French election, we are forecasting EUR/USD at 1.10 on a 12 mth view. rdquo 12:47 EUR/NOK room for further upside, focus on Norges Bank Danske Bank According to Analyst at Danske Bank Mathias Mogensen, the cross could attempt a squeeze higher in the near term. ldquoIn the Scandi FX sphere, the main focus this week will be the Norges Bank (NB) meeting on Thursday, where we expect NB to lower its rate path for 2017 by 10-15bp and thereby imply almost a 100 probability of a rate cut next yearrdquo. ldquoWe do not expect NB to cut further and we think that a dovish rate path along with the usual worsening of the liquidity situation going into end year could lead to some temporary upside support in EUR/NOK ndash especially after the past couple of daysrsquo decline on the back of the OPEC dealrdquo. 12:41 USD/JPY retreats from highs, back to 115.80 The greenback remains on a firm footing vs. the Japanese currency on Monday, with USD/JPY briefly testing fresh tops above 116.00 the figure. USD/JPY in 10-month peaks The pair is extending its rally for the sixth week in a row today, piercing the 116.00 handle for the first time since January although slipping back towards the 115.80 area soon afterwards. Spot keeps it upside unabated for the time being, as the solid performance from yields in the US money markets stay as the almost exclusive driver for the underlying bullish sentiment. Furthermore, the rally in crude oil prices has been boosted further after non-OPEC producers have agreed on Saturday in Vienna to cut the oil output, adding to the previous OPEC deal. The recent deal fuelled the risk-on trade, adding further selling pressure to the safe have JPY. In the data space, JPY speculative net shorts have climbed further during the week ended on December 6, reaching the highest level since early-August 2015 according to the latest CFTC report. USD/JPY levels to consider As of writing the pair is advancing 0.47 at 115.91 facing the next resistance at 116.12 (high Dec.12) ahead of 116.86 (78.6 Fibo of the 2016 drop) and finally 117.53 (high Feb.8). On the other hand, a breach of 112.99 (620-day sma) would aim for 112.84 (low Dec.5) and then 111.32 (low Nov.28). 12:27 BBG Survey: BOEs next rate move may be up as inflation tolerance tested Bloomberg conducted a survey on the outlook for the BOErsquos monetary policy program heading into 2017, with most economists see rate hike as the next move. Key findings from the Bloomberg survey: All the economists surveyed see rates staying on hold at 0.25 percent at this weekrsquos meeting, and the asset-purchase target at 435 billion pounds (547 billion) of government securities plus 10 billion pounds of corporate debt. More than 60 of economists see rate hike as next move While the next move may be tightening, it may not happen for some time. 41 of respondents see a rate rise by November, up from 21 three months earlier. The median forecast in a separate poll is for no change in rates until at least early 2019. Inflation probably accelerated to 1.1 percent in November, according to a separate survey. 12:20 Oil: More bullish price developments - MUFG Lee Hardman, Currency Analyst at MUFG, notes that the oil related currencies have been supported in the Asian trading session by a further jump in the price of oil which has lifted Brent to an intra-day high of USD57.89 per barrel. ldquoThe new cycle high for the price of oil has been triggered by further bullish developments over the weekend. Non-OPEC members reached an agreement to cut oil production by 558k barrels per day starting from January. It follows on from the recent agreement by OPEC members to cut production by 1.2 million barrels per day. It is the first joint pact to cut production between OPEC and non-OPEC members in fifteen years. The non-OPEC agreement includes pledges from Russia to cut production by 300k barrels per day, Mexico by 100k barrels per day, Azerbaijan by 35k barrels per day, and Kazakhstan by 20k barrels per day. rdquo ldquoAccording to reports, the joint OPEC and non-OPEC agreement covers around 60 of current oil production but excludes major producers including the US, China, Canada, Norway and Brazil. The price of oil has increased by around a fifth since the production cut agreements have been announced highlighting that the market is optimistic that it will help to rebalance demand and supply in the oil market more quickly. rdquo ldquoThe rebound in the price of oil has also been reinforced by comments over the weekend from Saudi Energy Minister Khalid Al-Falih who stated that Saudi Arabia will cut ldquocut substantially to belowrdquo their target agreed last month with other OPEC members. As part of the OPECrsquos agreement to cut production to 32.5 million barrels per day, Saudi Arabia has agreed to cut production to below 10 million barrels per day. The comments are an attempt to reinforce market confidence in the agreement given lingering concerns that the deals will not be implemented fully. Upside potential for the price of oil is also being dampened by expectations that supply from shale oil producers will increase in response to higher prices. rdquo ldquoOverall, the developments over the weekend support our outlook for a further gradual rebound for oil-related currencies in the year ahead. The higher price of oil is reinforcing Trump reflation trades. The yield on the 10-year US Treasury bond is now testing key resistance at 2.5 which if broken should result in a stronger US dollar especially against the yen. rdquo 12:12 EUR/USD recovers further to test 1.0600 amid negative equities The EUR/USD regains poise and now extends the upside in a bid to reclaim 1.06 handle, in wake of broad based US dollar correction and poor sentiment around the European stocks. EUR/USD: Will its sustain the recovery Currently, EUR/USD jumps 0.37 to trade near fresh daily highs of 1.0597, now looking to regain 5-DMA barrier located at 1.0614. The main currency pair is seen on a steady recovery path so far this session, with the EUR bulls gaining further momentum post-European open, after uncertainty over the Italian banking sector rescue plan crept into markets and weighed negatively on the European stocks, triggering a fresh risk-off wave and boosting the funding currency status of the EUR. Moreover, extension of the downside correction in the US dollar against its main peers, after last weekrsquos rally on an imminent Fed rate hike this month, also added to the renewed uptick in EUR/USD. Attention now turns towards tomorrowrsquos German ZEW sentiment and Wednesdayrsquos US retail sales and PPI data before a typical calm set into the market before the Fed decision. EUR/USD Technical Levels In terms of technicals, the pair finds the immediate resistance 1.0614 (5-DMA). A break beyond the last, doors will open for a test of 1.0623 (20-DMA) and from there to 1.0646 (10-DMA). On the flip side, the immediate support is placed at 1.0526 (5-day low) below which 1.0503 (multi-month low) and 1.0456 (March 2015 low) could be tested. 11:57 NZD/USD clings to gains beyond 50-DMA Having posted a session low at 0.7115, the NZD/USD pair managed to recover early losses and is now seen building on to its momentum back above 50-day SMA. Currently trading at fresh session peak near 0.7160 region, the pair gained fresh traction after Bill English was sworn in as New-Zealand39s new Prime Minister, which receded fears of political uncertainty following last week39s surprise exit of his predecessor John Key. Moreover, weekend oil output deal between OPEC and non-OPEC producers, provided an additional boost to investor sentiment and extended further support to the bid tone surrounding higher-yielding currencies - like the Kiwi. The pair is also benefiting from an upbeat report on the NZ government by the US-based ratings agency, Moodyrsquos Investors Service that showed government forecasts average annual GDP growth of 3.5 over 2017 and 2018 and lifted the pair back above 50-day SMA. This week39s major focus, however, would remain on two-day Fed monetary policy meeting starting Tuesday and the outcome would help investors to determine the pair39s near-term trajectory. The Fed is scheduled to announce its monetary policy decision later during NY session on Wednesday. In the meantime, Tuesday39s Chinese economic data might provide some trading opportunities for short-term traders. Technical levels to watch From current levels, 0.7175 level is likely to act as immediate resistance above which the pair seems to retake 0.7200 handle (100-day SMA) and head towards testing its next resistance near 0.7228-30 region (Nov. 11 high). On the downside, weakness back below 50-day SMA support near 0.7145 region now seems to drag the pair back towards session low support near 0.7115 before eventually dropping to 0.7100 handle. 11:54 GBP/USD offered above 1.26, hits fresh lows near 1.2570 The GBP/USD pair ran through fresh offers above 1.26 handle over the last hours, now dropping to fresh session lows of 1.2571, down -0.14 on the day. The cable stalled its recovery mode and fell back in negative territory, after a renewed bout of risk-aversion gripped the European markets and dampened the sentiment around the higher-yielding currencies such as the GBP. The major witnessed fresh buying interest earlier today and rallied as high as 1.2612, mainly driven by cross-driven strength, helped by fresh selling in EUR/GBP and at the same time GBP/JPY demand. Amid a data-empty fundamental calendar for today, focus shifts towards Tuesdayrsquos China data dump and UK CPI report for further momentum on the major. In terms of technical levels, upside barriers are lined up at 1.2635 (10-DMA), 1.2650 (psychological levels) and 1.2704 (100-DMA). While supports are seen at 1.2548/45/42 (Dec 9 amp 8 low/ 20-DMA) and 1.2498 (Dec low) and below that at 1.2421 (50-DMA). 11:42 ECBs Nowotny: Bond yield steepening is not bad - BBG Speaking at an event in Vienna on Monday, ECB governing council member Ewald Nowotny commented on the Italian banking crisis and rising bond yields. Key Headlines via Bloomberg: Bond yield steepening is not bad Italy has structural, not only banking, problems 11:18 USD/CHF turns lower, upside remains capped at 1.0200 level Having once again failing to decisively move above 1.0200 handle, the USD/CHF pair ran through fresh offers on Monday and has drifted into negative territory. Currently trading around 1.0165-60 region, testing session lows, the pair witnessed a profit taking slide on Monday after struggling to build on last week39s strong up-move from 3-week low to the highest level since early Feb. Ahead of the much-awaited FOMC meeting on Wednesday, investors seem to position themselves cautiously and prefer to take some profits off the table. With a 25 bps interest-rate hike fully priced-in, investors will now look for clues over the possibilities and timing of next Fed rate-hike action in 2017 from the updated interest-rate and economic projections (dot-plots), accompanying the monetary policy statement. Technical levels to watch Weakness below 1.0150 level is likely to accelerate the slide back towards 1.0100 round figure mark with some intermediate support near 1.0130 level. Alternatively, on a sustained move above 1.0175 immediate resistance the pair is likely to make a fresh attempt towards conquering 1.0200 handle above which the pair seems to aim towards yearly highs resistance near 1.0255-60 region. 11:15 EUR/SEK aims higher in the near term Danske Bank In view of Mathias Mogensen, Analyst at Danske Bank, the Swedish Krona could come under further pressure in light of the release of key data and the Riksbank. ldquoIn Sweden, the inflation figures on Tuesday will be monitored closely as the outcome is likely to be pivotal for the Riksbankrsquos monetary policy announcement on 21 December. Our estimates for November CPIF and CPIF excluding energy are 1.56 y/y and 1.21 y/y, respectively. This is 0.15pp and 0.17pp below the Riksbankrsquos corresponding respective estimates and implies that the difference compared with October remainsrdquo. ldquoLower-than-expected inflation is the most important reason why we still expect the Riksbank to extend its QE purchases by another SEK30bn and also expect it to deliver a 10bp rate cut in December. While the QE extension is fully expected in the market, we note that a rate cut is not priced at allrdquo. ldquoAccording to our short term financial models, a 10bp widening of the two-year SEK-EUR interest rate swap spread would ndash all else being equal ndash lead to a 20 figure increase in EUR/SEK . Hence, we see a large digital risk around the Riksbank meeting in the sense that EUR/SEK could spike higher temporarily in the event of a rate cut, while no cut would be fairly neutral for EUR/SEKrdquo. 11:08 Fed: Odds of a 25bp rate hike this week are 92 - SocGen Kit Juckes, Research Analyst at Societe Generale, notes that the Bloomberg puts the odds of a 25bp Fed rate hike this week at 92 and the odds of a 50bp hike at 8. ldquoItrsquos fair to say that a hike is fully priced-in and if the old lsquobuy the rumour, sell the factrsquo adage has any value, maybe wersquore supposed to look for some correction in the dollar rally and the bond sell-off after the event. rdquo 11:07 German Economy Ministry: Economy to pick up in Q4 after slowdown in Q3 - RTRS Reuters reported headlines from the German Economy Ministry, sounding upbeat on the German economic outlook. Global economic environment remains difficult but seems to be gradually brightening up a bit, which will improve outlook for exports Indicators point to a certain pick-up in manufacturing in coming months Private sector consumption continues to receive reliable boost from labor market Reduction in unemployment is being slowed by refugee intake 11:04 Italy moves quickly to replace Prime Minster Renzi MUFG Lee Hardman, Currency Analyst at MUFG, notes that in the main development from the Eurozone over the weekend Italian President Mattarella has asked outgoing Foreign Minister Gentiloni to form a new government. ldquoPresident Mattarella had emphasized that Italy needs a ldquofully functional government within a short time framerdquo in order to meet its domestic, European, and global commitments. As there have been no significant defections from the coalition since Prime Minister Renzi resigned, former Foreign Minister Gentiloni should be able to count on a combination of the centre-left Democratic Party and other centrists to stay in power. rdquo ldquoThe leader of the Five Star Movement Luigi Di Maio has called Gentiloni a Renzi ldquoavatarrdquo. It has been reported that he is likely to face pressure to step aside in the first half of next year because former Prime Minister Renzi wants to hold early elections ahead of the next scheduled elections due early in 2018. Former Prime Minister Renzi reportedly plans to call a Democratic Party congress early next year to confirm him as their leader before standing as its candidate in early elections. Holding early elections would reinforce our outlook for a weaker euro in 2017.rdquo ldquoA caretaker government led by Gentiloni is expected to have a short shelf life. The main priorities will be to harmonise the electoral laws for the lower and upper houses which President Mattarella described as ldquoindispensablerdquo before holding a vote, and addressing urgent problems in the banking sector. It follows the announcement late last week that the ECB has rejected a request from Monte dei Paschi di Siena for extra time to raise private capital. rdquo 11:04 US Dollar flat around 101.60 ahead of FOMC The greenback, tracked by the US Dollar Index . is trading almost unchanged at the beginning of the week, currently hovering over the 101.60 area. US Dollar finds support near 101.50 The index is navigating a tight range on Monday as market participants continue to adjust to the potential 25 bp rate hike by the Federal Reserve at its meeting on Wednesday. In the meantime, USD is looking to consolidate Novemberrsquos rally around the mid-101.00s, with gains so far capped by the 13-year top above the 102.00 handle and support around last weekrsquos lows in the mid-99.00s. Expectations of further tightening by the Fed on Wednesday, prospects of higher inflation in the US economy in the next months and a persistent steady/dovish stance from Fed peers all continue to give support to the buck. Adding to the above, the latest CFTC report showed USD speculative net longs have climbed at the highest level since August 2015 on the week to December 6. US Dollar relevant levels The index is losing 0.03 at 101.57 and a breakdown of 101.06 (20-day sma) would aim for 99.87 (low Dec.5) and finally 99.49 (low Dec.8). On the flip side, the initial hurdle is located at 101.80 (high Dec.5) ahead of 101.88 (high Nov.30) and finally 102.12 (2016 high Nov.24). 11:01 GBP/USD has been sidelined From a technical perspective the outlook for GBP/USD is probably no worse than neutral. The alignment of the 50-200-800 simple moving averages, on the 1hr chart does not show a clear trend in existence, nor the below 30 ADX at the moment is a sign of a constructive price structure. The prospect for the building of triangles, rectangles, and pennants looks to be quite realistic. Traders may opt to capitalise on such chartist patterns and their price projections. 11:01 USD/RUB remains well offered USD/RUB is capturing attention with its sustained price move and soaring volatility. The search for a low in todays trading is reflected in the 2-standard deviation bands expanding for several consecutive hours. Moreover, the near-term technical picture shows recent close prices printing below the 50 exponential moving average, a bearish condition that should it persist, would help maintain prices below the SAR indicator. The parabolic SAR has yet to switch direction after two sessions of downward price movement. By doing so means shorts are taking profit. Risks exist the volatility and down drift extend to higher time frames. 10:59 WTI strongest since July 2015 on global output cut deal Oil futures on NYMEX witnessed a bullish opening gap on Monday, starting a new week with a bang after oil traders cheered the joint oil output cut deal reached between the OPEC and non-OPEC producers for the first time since 2001. Oil: Attention turns to OPEC, non-OPEC meeting Currently WTI advances 5.17 to 54.16, reverting towards fresh seventeen-month highs of 54.50 reached earlier today. Oil prices keep the ongoing rally intact and consolidate the upside as markets assess the implications of the deal signed after years of disagreements and arguments between the OPEC and non-OPEC producers. Analysts at Goldman Sachs noted, ldquoWe believe that the observation of the OPEC-11 and non-OPEC 11 production cuts is required to sustainably support. oil prices to our 1H17 WTI price forecast of 55 a barrelquot quotThis forecast reflects an effective 1.0 million barrels per day (bpd) cut vs. the 1.6 million bpd announced cut and greater compliance to the announced cuts is therefore an upside risk to our forecasts. quot OPEC planned an output cut by 1.2 million bpd from Jan. 1, with the non-OPEC producers now agreeing to reduce output by 558k bpd, slightly short of 600k bpd expectations. Next of note for the black gold remains the FOMC meeting due later this week, which is expected to have major impact on the US dollar, eventually impacting the USD-denominated oil. WTI technical levels A break above 55 (key barrier) could yield a test of daily R2 of 55.58. On the lower side, breach of support at 53.67 (daily pivot) would expose the daily low of 52.59.rdquo 10:46 AUD/USD could slip back towards 0.7310/12 Commerzbank According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, spot could grind lower to the 0.7310 area. ldquo AUD/USD last week saw only a minor erosion of the 38.2 retracement at .7490 and reversed well ahead of the 55 and 200 day ma at 7532/62. We suspect that the near term strength has ended and ideally we look for failure (favoured) and a retest of the .7312/10 mid June low and the 78.6 Fibonacci retracement at .7287/81rdquo. ldquoFurther down lurks the May low at .7146. We view AUD/USD as having topped and eventually expect it to slide back to the .6828 January low. A close below the .7420 support line would add weight to our viewrdquo. ldquoAbove .7565 will delay our bearish outlook and allow for .7600 and potentially .7678rdquo. 10:38 USD/JPY hits 116.00 handle amid prevalent risk-on mood The USD/JPY pair maintained its strong bid tone and jumped to 116.00 handle for the first time since Feb. 8. Weekend oil output deal between OPEC cartel and non-OPEC producers led to a fresh wave of risk-on trade on Monday and is seen weighing heavily on traditional safe-haven assets, including the Japanese Yen. Even the upbeat release of Core Machinery Orders from Japan did little to restrict the pair39s strong up-move on Monday. Meanwhile, the bullish US Dollar consolidative move, amid firm expectations of an imminent Fed rate-hike action on Wednesday, is also supportive for the pair39s strong up-move to 10-month peak. Investors will also look forward to the Fed39s updated economic and interest rate projections (dot-plots), accompanying the monetary policy decision announcement, in order to evaluate possibilities and timing of next Fed rate-hike move in 2017, which would eventually provide fresh impetus for the pair39s next leg of directional move. Technical levels to watch A follow through buying interest has the potential to continue boosting the pair towards its next major hurdle near 116.75 region, with 116.50 region (Jan. 21 low) acting as intermediate resistance. On the downside, weakness below 115.50-40 immediate support could get extended towards session low support near 115.15 level below which the pair could extend its corrective slide towards 114.50 region. 10:38 EUR/USD firmer, advances to highs near 1.0580 The single currency is now picking up extra pace, lifting EUR/USD to the area of fresh daily peaks near 1.0580. EUR/USD under pressure, focus on data, FOMC Spot has managed to bounce off recent lows in the 1.0530/25 band following a now softer tone around the greenback at the beginning of the week. Despite the ongoing correction higher, spot stays under pressure following last weekrsquos dovish stance from the ECB at its meeting, while the prospects of a rate hike at the FOMC meeting on Wednesday also weighing on sentiment from the USD-side. Nothing scheduled today in both Euroland and the US, although cautiousness is expected to grow bigger as we get closer to the FOMC gathering. In the meantime, the ZEW Survey in Germany and the euro area on Tuesday should give a glance of investorsrsquo sentiment in the area. From the speculatorsrsquo view, EUR net shorts have dropped to the lowest level since mid-October during the week ended on December 6. EUR/USD levels to watch The pair is now up 0.15 at 1.0572 facing the next resistance at 1.0629 (20-day sma) followed by 1.0798 (high Dec.5) and finally 1.0873 (spike post-ECB Dec.8). On the flip side, a breakdown of 1.0515 (low Nov.24) would target 1.0503 (2016 low Dec.5) en route to 1.0457 (2015 low Mar.16). 10:15 EUR/USD still a sell on rallies Danske Bank Analyst Mathias Mogensen at Danske Bank still recommends selling the pair on occasional up ticks. ldquoCurrencies of oil-producing countries gained further overnight as the OPEC deal was officially announced. As for the rest of the FX market, we will probably have a relatively quiet start to a very busy week, as investors digest the news of the OPEC deal and await the FOMC meeting on Wednesday where both we and the market expect the FOMC to hike the Fed Funds raterdquo. ldquoAlthough a 25bp rate hike is almost fully priced in, we still see a case for a further short-term squeeze lower in EUR/USD ndash especially as the ECBrsquos Draghi last week managed to deliver a relatively dovish message at the ECB meeting. Hence, in the short term, our tactical view is still to sell on ralliesrdquo. ldquoHowever, while we could still see EUR/USD dropping below 1.05 in the short term, we still hold the view that EUR/USD is likely to go higher in 2017 despite Trump. Beside the fact that flows and positioning are EUR positive and that EUR/USD is fundamentally very oversold, we also note that the Fedrsquos trade-weighted dollar has reached the strongest level since 2002. If the USD becomes too strong, the Fed will turn dovish exactly as it did early this yearrdquo. ldquoWe target EUR/USD at 1.12 in 12M and we advise EUR - and DKK-based clients with USD income/assets to take advantage of a possible further USD rally and increase hedge ratio on USD exposurerdquo. ldquoGiven the large political uncertainty surrounding both EUR and USD next year (elections and Brexit in Europe and Trump), we generally recommend to hedge USD exposure via options that maintain a profit potential in the event of further decline in EUR/USD next yearrdquo. 10:12 GBP/USD retakes 1.2600 handle but lacks momentum The GBP/USD pair built on to its early recovery momentum and has now reversed Friday39s minor losses to move back marginally above 1.2600 handle. After spending majority of the Asian session the said handle, the pair caught fresh bids during early European session amid subdued greenback price-action. The momentum, however, lacked conviction as investors now look to central bank decisions from both, the US and UK later during this week. The US Federal Reserve is widely expected to raise interest rates by 25 bps on Thursday, while the Bank of England . on Thursday, is expected to keep its current monetary policy stance unchanged. Meanwhile, the accompanying rate-statements and subsequent press conference would be looked upon for fresh insights over the central banks near-term monetary policy outlook and help investors determine the pair39s trajectory in the near-term. In absence of any major market moving releases on Monday, the pair would take clues from the broader sentiment surrounding the US Dollar, which would continue to be driven by expectations over the pace of Fed rate-hike next year. Technical levels to watch A follow through buying interest, leading to a momentum above 1.2620 resistance (Friday39s high), is likely to trigger a short-covering rally immediately towards 1.2670-75 intermediate resistance en-route 1.2700 round figure mark. On the downside, weakness below session low support near 1.2575 level is likely to drag the pair back towards an important support near 1.2550 region, which if broken might accelerate the slide towards 1.2500 psychological mark. 10:04 USD/JPY bid above 113.84 Commerzbank In view of Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pairrsquos bias stays bid above 113.84. ldquo USD/JPY has eroded its 100 week ma at 114.74, and appears to already be resuming its up move. Last week price action held rigidly above the Imoku 1 support, currently at 113.84 and the market is immediately bid above here. We note the 13 count on the 60 minute chart and may see a small dip lower very near termrdquo. ldquoAbove here we also have the 61.8 retracement of the move 2015- 2016) at 116.00 and we are allowing for a near term consolidation. Above here would target 120.00/120.10, the 78.6 retracement of the move down from 2015rdquo. 10:02 Denmark Inflation (HICP) (YoY) remains at 0.1 in November 09:59 ECB: Greater longevity, exibility and asymmetry in the APP Goldman Sachs Lasse Holboell Nielsen, Research Analyst at Goldman Sachs, notes that the ECB in its latest meet announced a continuation of its Asset Purchase Programme (APP) for a further nine months, from April 2017 to December 2017 (ldquoor beyond, if necessary, and in any case .. until a sustained adjustment in the path of ination consistent with its ination aimrdquo). ldquoThe monthly pace of asset purchases will slow as from April 2017 to euro60bn, from the current pace of euro80bn per month. This is lower than we expected. rdquo ldquoAt the post-meeting press conference, President Draghi emphasised then longevity of the asset purchase programme. He mentioned several times that lsquotaperingrsquo (which he dened as a gradual path of reduction to zero purchases) had not been discussed during the meeting. More specically, Mr. Draghi stated that the Governing Council had chosen a nine-month extension at euro60bn per month over a shorter six-month extension at a faster euro80bn per month pace. Mr. Draghi also emphasised that the ECB sought to maintain ldquoa sustained market presenceldquo through extending the duration of the programme. rdquo ldquoThe Governing Council introduced greater exibility into the implementation of asset purchases, introducing the possibility of increasing the pace and/or duration of the APP should the ldquooutlook become less favourableldquo or if nancial conditions tighten excessively. rdquo ldquoThe new exibility in the programme was styled as asymmetric. By contrast with the explicit signal of increased purchases should conditions deteriorate, Mr. Draghi described any prospects of moving below the euro60bn monthly purchase pace as ldquofar, far away. rdquo ldquoIn terms of the broader macroeconomic outlook, the ECB staff forecast was left essentially unchanged from September. The (new) ECB forecast for ination in 2019 was 1.7. Mr. Draghi characterised this forecast as ldquonot reallyldquo in line with the ECBrsquos objective (HICP ination ldquobelow, but close to, 2pardquo), thus providing a macroeconomic rationale for the extension of asset purchases. rdquo ldquoWith latest announcements we maintain our forecast that the APP will continue through 2018 (at a progressively reduced pace from the euro60bn per month we will see from April to December next year).rdquo ldquoWe maintain our view that the rst ECB rate increase remains distant. We do not expect the rst hike until end-2019, somewhat later than current market pricing. rdquo 09:53 EURCAD: Short, medium and long-term trend oscillators are moving into bearish alignment - Scotiabank EURCAD closed out a fifth, consecutive losing week at its lowest level in nearly 18 months as noted by the Analysts at Scotiabank. ldquoThe cross has had a very poor few weeksmdashreversing strongly from 1.50, falling below major trend support in the low 1.44s and losing long-term, retracement support at 1.4203. As noted previously, weekly and monthly bear reversals were signaled by Novemberrsquos price moves and the loss of support at 1.42 implied a drop to the 76.4 retracement at 1.3755mdash which looks reachable in the relative near-term. Beyond that, there is some support around 1.35 but little, major support until the 1.30 area. rdquo ldquoWe are not excluding the risk of the bear move extending towards 1.30/1.35 in the next few months. Short, medium and long-term trend oscillators are slowly moving into bearish alignment, which will aid and abet the slide and limit scope for EUR counter-trend rallies. rdquo 09:43 ECB: The beginning of the end of QE Commerzbank After the ECB opted to prolong its bond purchases by nine months and to lower the volume to euro60bn, investors are asking whether this marks the beginning of the process of exiting from bond purchases notes Dr Joerg Kraemer, Chief Economist at Commerzbank. lsquoThe ECB knows that from the beginning of 2018 onwards it will have bought up one third of German and Italian government bonds. It would then have reached its self-imposed upper limit, which for legal reasons it cannot simply raise, as Draghi stressed. So at some point it will in any case be forced to taper off purchases. It thus makes sense to try out a moderate reduction in the monthly purchase volume. The timing is good in that, with the attempted senate reforms in Italy failing on Monday, Italian government bonds have proved highly resilient. rdquo ldquoTo ensure that they remain so, Draghi took steps at latest press conference to reassure people. First, he announced that if need be the volume of purchases would be increased again. Second, the bank extended the pool of eligible bonds by stating that in future it could formally also buy bonds with a residual maturity of only one year. This increases the volume of bonds eligible for purchase and mathematically reduces the percentage of bonds it holds. We now estimate that the ECB would reach the 33 upper limit six months later. And finally, the bank has created the option of also buying bonds when their yield is below the deposit rate. rdquo ldquoThe ECB did everything it could to reassure the market after reducing its purchase volume. In 2018, however, it will be forced to scale down purchases gradually if it is not to exceed the legal limit. Yet this does not mean an end to the bank39s very generous monetary approach. The causes of the government debt crisis are after all more acute than ever, and there is a threat of it re-emerging. rdquo ldquoConsequently, the Eurozone cannot settle down. Growth remains unstable, and contrary to what the ECB is hoping, core inflation is unlikely to see a sustained increase. As a result, the bank can be expected to adopt aggressive countermeasures once it is forced to end its bond purchases, probably in 2018. It could, for example, offer the commercial banks a long-term tender with a maturity of around five years. This would enable banks in the southern Eurozone countries to buy up their own bonds with cheap ECB money, taking over from the ECB as buyers. So sadly, it does not mark the beginning of the end of far too relaxed a monetary policy. rdquo 09:42 USD/CAD extends the drop, approaches 1.3100 The Canadian dollar remains on a firm fashion vs. its American peer on Monday, dragging USD/CAD to the vicinity of the 1.3100 handle, fresh session lows. USD/CAD lower on WTI gains CAD is deriving extra support from the rally in crude oil prices, with the barrel of West Texas Intermediate hovering over fresh 17-month tops above the 54.00 mark following the recent agreement between non-OPEC producers no cut the oil output by nearly 560K bpd. In addition, the buck is trading almost unchanged so far today amidst rising cautiousness in light of the upcoming FOMC meeting and the likeliness of a 25bp rate hike on Wednesday. In addition, and as shown by the latest CFTC report, CAD speculative net shorts remained in the area of multi-week lows, while Open Interest dropped to the lowest level since mid-October on the week to December 6. USD/CAD significant levels As of writing the pair is losing 0.52 at 1.3117 facing the next support at 1.3063 (200-day sma) ahead of 1.3002 (low Oct.19) and finally 1.2996 (low Sep.29). On the other hand, a break above 1.3193 (100-day sma) would open the door to 1.3311 (38.2 Fibo of the 2016 drop) and then 1.3357 (high Dec.5). 09:40 GBP/JPY darting back towards 146.00 handle The GBP/JPY cross was seen building on to its recent break-out momentum above the very important 200-day SMA resistance and is now inching closer to over 6-month highs touched last week. Currently trading around 145.80 region, testing session peak, the cross extended its near-term bullish trajectory, and after advancing for eight consecutive weeks, gained fresh traction on Monday amid prevalent risk-on mood in wake of weekend deal over oil output cut between OPEC and non-OPEC members. Even from technical perspective, sustained trading above 200-day SMA, for the first time in 2016, is suggestive of a bullish break-out and has thus increased possibilities of continuation of the pair39s appreciating move in the near-term. Technical levels to watch On the upside, last week39s multi-month high near 146.00 handle is likely to act as immediate resistance above which the pair seems to dart towards 147.00 round figure mark before eventually heading towards its next major resistance near 147.95-148.00 region. On the flip side, 145.00 psychological mark now becomes immediate support to defend, which if broken might trigger a corrective slide back towards 200-day SMA support near 143.30 region, with 144.40 and 144.00 mark acting as intermediate support levels. 09:30 BOJ likely to upgrade economic view next week - RTRS Sources Reuters quotes sources familiar with the matter, noting that the Bank of Japan (BOJ) officials are likely to upgrade economic view next week, reflecting optimistic economic view. Reuters sources also noted that the BOJ officials think global trade emerging from doldrums and they seem encouraged by signs of recovery in Japanese private consumption. 09:28 USDCAD weaker but decline perhaps losing momentum - Scotiabank Analysts at Scotiabank notes that the USDCAD retains a soft undertone after two weeks of steady losses. ldquoShort-term charts do suggest that the USDrsquos slide is losing momentum (a descending wedge on the hourly chart and small, inside range on the 6-hour chart) but there is scantmdashas in nomdashsign of a reversal in the daily trend lower at the moment. Spot has lost important support in the low/mid 1.32 area this week but signs of a slowing in the decline is coming a little ahead of the 76.4 retracement of the Oct/Nov rally at 1.3145.rdquo ldquoWe note important, long-term support below here at 1.3090/00, where the base of the broader USD bull trend currently resides. Short-term trend momentum signals are aligned bearishly for the USD, suggesting the USD may struggle to improve significantly at the moment. We think the USD needs to get back above 1.3240/50 in order to stabilize or improve from here. rdquo 09:24 NZD/USD targeting 0.7200 this week - Westpac The stalled US dollar allows NZrsquos strong fundamentals (referenced by RBNZ Governor Wheeler) to come to the fore of the NZD/USD market, targeting 0.7200 this week suggests Imre Speizer, Research Analyst at Westpac. ldquoDairy prices are an important medium term influence on the NZD, but only a weak influence short term. Still, the 95 rise in WMP since Feb is significant, resulting so far in an increase in the farmer milk payout from 4.25/kg to 6.00. All else constant, the higher dairy prices should eventually boost the NZD. rdquo ldquoTechnically, there may be some resistance near term at around 0.7200 which is previous trend support. However daily momentum has flipped to positive so the risks are for even higher during the week ahead. rdquo 09:20 JPY traders put their shorts on - Scotiabank CFTC positioning report covering data up to Tuesday December 6 highlighted the fact that speculative investors turned net short (barely) JPY for the first time in 2016 notes Research Team at Scotiabank. ldquoThis weekrsquos update suggests that futures traders did little else but pile on JPY shorts this week. In aggregate, broader sentiment is the most bullish USD since the start of the year. Overall positioning long the USD rose USD3.4bn in the week through Tuesday to reach USD29.7bn, the biggest bull bet on the USD since January. rdquo ldquoThe JPY trade accounted for all of that increase investors were only small short JPY last week but lifted positioning aggressively through Tuesday to stake out a net short of USD3.7bnmdashan increase on the week of 34k contracts from basically flat. The bearish positioning swing over the past three months is the largest in four years and reflects the sharp deterioration in JPY sentiment as US-Japan long-term yield spreads widen to the biggest yield premium for the USD since 2010.rdquo ldquo EUR sentiment was more or less stable in the week net EUR shorts remain significant and still represent the biggest single bear bet on the USD and net short exposure was trimmed only modestly running into the ECB meeting. Net GBP shorts were cut slightly this week and while net shorts were built in the NZD and CHF, the change and net positioning is minor. rdquo ldquo CAD sentiment remains largely negative net exposure was reduced very slightly in the week as both gross shorts and longs pared exposure. rdquo 09:17 Forex Today: USD/JPY hits new 10-months tops in Asia, FOMC - Key The Asian markets opened the Big week on a bullish note, with risk-on moods prevalent across Asia amid rallying oil prices, in wake of weekendrsquos oil output deal reached between OPEC and non-OPEC producers. Hence, the yen emerged the weakest amid non-existent safe-haven flows, while broad based US dollar upside consolidation drove moves across the fx space. Looking ahead, the FOMC interest rate decision remains the much-awaited and highly influential event of this week, which will set the tone for the markets for the balance of this holiday-thinned month. In the meantime, markets will take cues from the Chinese data dump, UK CPI, US retail sales and BOE Carneyrsquos speech. Later today, we have a data-empty EUR and US calendar, and hence, oil-driven market sentiment will continue to influence fx pairs. Main topics in Asia Oil: what a mover, to highest levels since July 201539s glut sell-off from 56 Oil is much higher in early Asia on the back of the weekend news with a gap through 52.00 and has reached a high of 54.31 in WTI so far. NZIER: Forecasters have revised up their NZ growth and inflation forecasts The New Zealand Institute of Economic Research (NZIER) published a forecast from economists for the NZ economy on Monday, with the forecasts for growth and inflation revised upwards. UKrsquos BCC: UK 39s current GDP growth rate won39t last ndash BBC News The UKrsquos British Chambers of Commerce (BCC) upgraded its 207 growth forecasts for the UK economy, although warned that higher growth prospects are unsustainable in wake of uncertainty over the UK39s EU relationship. BOJ quotmay soon have to think about tightening for the first time since 2007quot - WSJ The Wall Street Journal (WSJ) ran a story over the weekend, noting that Japanese central bank the BOJ may soon have to resort to tightening for the first time since 2007 in wake of higher inflation expectations from the Trumprsquos presidency. BOJ tapering sees bond buying slow toward 70 trillion yen - BBG Bloomberg carried an article this Monday, noting that the Bank of Japan (BOJ) technically have retained their target for the annual increase in government bond holdings at 80 trillion yen (699 billion), there are signs the buying may come in closer to 70 trillion yen. Key focus for the day ahead EUR/USD under pressure, eyes on 1.0505 ndash Commerzbank Karen Jones, Head of FICC Technical Analysis at Commerzbank, noted the pair remains poised for a re-visit to recent lows at 1.0505. PBOCrsquos Sheng: Hike in interest rates is unlikely in China An advisor to the People39s Bank of China (PBOC), Sheng Songcheng, crossed the wires last minutes, via Bloomberg, noting that an interest rate hike is unlikely in China. Another repatriation wave into the USD - Westpac The US presidential election has given fresh impetus to another repatriation tax holiday for US corporate earnings held offshore notes Research Team at Westpac and they expect that the US equities and the USD will be the main beneficiaries, mostly in 2018. Fed December hikes: an annual thing - Rabobank Analysts at Rabobank said that it seems like we can add the Fedrsquos annual hike to the calendar as a recurring event in December. 09:04 AUD/USD recovers back above 0.7450 level The AUD/USD pair caught fresh bids at lower level and recovered over 25-pips from session low level near 0.7430 region. Currently trading around 0.7455-60 region, weekend deal between OPEC and non-OPEC member trigger a fresh wave of risk-on sentiment across global financial markets and is seen supporting the bid tone surrounding riskier / higher-yielding currencies - like the Aussie. Moreover, a subdued greenback price-action, as markets cautiously await for the Fed monetary policy decision on Wednesday, is further supportive of the pair39s recovery on the first trading day of the week. With a relatively empty economic docket . broader market risk sentiment would remain a key determinant of the pair39s movement on Monday. However, firming expectations that the Fed would certainly raise interest rates on Wednesday, coupled with growing speculations of fast rate-tightening cycle next year, is likely to restrict any sharp up-move and the pair might remain confined within its near-term trading range. Technical levels to watch On a sustained move above 0.7465 level (session peak), the pair is likely to make a fresh attempt to conquer 0.7500 psychological mark above which the momentum could get extended towards the very important 200-day SMA resistance near 0.7530 region. On the downside, decisive break below 0.7440-30 support (session low) seems to drag the pair immediately towards 0.7415-10 region ahead of 0.7400 round figure mark. 09:02 AUD/USD should test the 0.7577 - Westpac AUD/USD should test the 100dma at 0.7577 in the week ahead, aided by a softer USD post-FOMC meeting expects Sean Callow, Research Analyst at Westpac. ldquoAUD/USD trading ranges have narrowed of late, consistent with support from key commodity prices (spot iron ore gt80, coking coal 300) but upside is limited by lacklustre domestic data, simmering volatility in Asian capital flows and the US dollarrsquos underpinnings from the looming Fed rate hike. rdquo ldquoQ3 was weak across the board but home building and public spending at least should rebound in Q4. Another poor jobs reading would reinforce the gloomy domestic theme. Yet AUD has absorbed bad news recently with insulation from the lack of market desire to price in RBA rate cut risk, given its patience over inflation and the global mood. rdquo 09:01 Romania Consumer Price Index dipped from previous -0.4to -0.7 in November 08:59 USD/JPY should rise to 120 by end-2017 - Nomura Research Team at Nomura explains that if the Fed raises rates in December and carries out two additional rate hikes in 2017, as Nomurarsquos economists expect, USD/JPY will likely reach 120 by end-2017. ldquoUSD would tend to strengthen more in the latter half of the year, when we would know more about the Trump administrationrsquos fiscal policies. At the same time, there is considerable uncertainty about the USrsquos economic measures in 2018, and at this point we expect a neutral level of 114 at end-2018. For USD/JPY to stay above 120, we believe the US economy, which is already entering the last stage of its recovery, has to show a significant rise in productivity. rdquo ldquo BOJrsquos yield curve control to support JPY depreciation Although playing a secondary role, Japanrsquos fundamentals should also support a rise in USD/JPY, in our view. The BOJrsquos yield curve control measures have had a remarkable effect on keeping yen interest rates stable/low levels even as yields rise globally, and as the gap between yields widens, this is expected to weaken JPY. If USD/JPY nears 120, Japanrsquos inflation rate would likely rise to the mid 1 range, possibly spurring expectations in the market that the BOJ would taper its asset purchases. However, we do not expect inflation to exceed 2 as an underlying trend, and the BOJ is unlikely to take a hawkish stance during Governor Kurodarsquos term (which ends in April 2018).rdquo 08:52 EUR/USD under pressure, eyes on 1.0505 Commerzbank Karen Jones, Head of FICC Technical Analysis at Commerzbank, noted the pair remains poised for a re-visit to recent lows at 1.0505. ldquo EUR/USD last week briefly spiked up to 1.0875, this was exhaustive price action and attention has reverted to support at 1.0505 and 1.0467, the recent low and the March low. This remains a major break down point to parity and beyondrdquo. ldquoAbove 1.0875 would initiate a deeper retracement to 1.0910 then 1.1000 (this is not favoured) and while it would be enough to delay our bearish outlook, it is would not be enough to negate it. 08:45 PBOCs Sheng: Hike in interest rates is unlikely in China An advisor to the People39s Bank of China (PBOC), Sheng Songcheng, crossed the wires last minutes, via Bloomberg, noting that an interest rate hike is unlikely in China. He further added that rate hike is pending economic recovery. No further details have been mentioned on the same. 08:38 Gold hovering around 10-month lows Having recorded five consecutive week of losses, Gold extended its recent downward trajectory and dropped to the lowest level in over 10-month on Monday. The metal, however, has managed to pull back from session lows and is currently trading with mild weakness around 1157 region. Firming expectations of an eventual Fed rate-hike action this week has been curbing flows towards the non-yielding precious metal. Moreover, anticipated higher interest rates in the US has been the driving the US Dollar higher and is also weighing on dollar-denominated commodities - like gold. Adding to this, weekend oil output cut deal between OPEC and non-OPEC deal triggered a fresh wave of risk-on mood on Monday, which is eventually denting demand for traditional safe-haven assets and did little to halt the yellow metal39s ongoing depreciating move. Investors now anxiously await for the outcome of Fed39s two monetary policy meeting, scheduled to be announced on Wednesday. The accompanying rate-statement would provide policymakers projections for interest rates, and growth numbers, which would help investors evaluate the pace of monetary tightening next year and determine the next leg of directional move for the precious metal. Technical levels to watch Any recovery attempts now seems to confront immediate resistance near 1160 level above which the momentum could get extended towards 1169-70 horizontal resistance en-route 1173-75 resistance area. On the downside, weakness below 1154 session low support seems to drag the commodity towards 1150 support below which the metal seems to head towards testing 1140 support area. 08:35 GBP/USD upside capped by 1.2600, data, FOMC eyed The Sterling is posting marginal losses vs. the greenback at the beginning of the week, with GBP/USD sidelining below the 1.2600 handle. GBP/USD appears supported near .12580 The pair is following the generalized absence of a clear direction in the global markets, navigating within a narrow range and with gains so far limited around the critical 1.2600 barrier. Looking ahead, GBP should remain under pressure in light of the release of inflation figures for the month of November (Tuesday) and the labour market report (Wednesday), although the most salient event will be the FOMC meeting on Wednesday. Recall that a 25 bp rate hike seems to be already fully priced in, although market participants will shift their attention to the future rate path and the potential steps by the Federal Reserve in the next year. On the positioning side, GBP speculative shorts have been trimmed to the lowest level since early August, while net shorts have retreated from record levels during the week ended on December 6 and according to the latest CFTC report. GBP/USD levels to consider As of writing the pair is losing 0.02 at 1.2588 and a break below 1.2545 (low Dec.9) would expose 1.2530 (20-day sma) and then 1.2462 (55-day sma). On the flip side, the next hurdle aligns at 1.2706 (high Dec.8) followed by 1.2767 (100-day sma) and finally 1.2776 (high Dec.6). 08:34 Kazakhstan EnergyMin: 20K bpd output cut is token - RTRS Kazakhstan energy minister expressed his taken on the oil output cut deal, noting that the 20k bpd output cut agreed with OPEC is a lsquotokenrsquo, adding that they have no plans to limit output at Kashagan, Karachaganak or Tengiz projects. 08:34 USD/JPY tops 115 level, eyes on 120 now Deutsche Bank Taisuke Tanaka, Strategist at Deutsche Bank, expects the USD/JPY to top 120 if DBrsquos new US yield forecasts could materialize. ldquoThe USD/JPY has already reached our 2017 forecast level of 115. Our revised forecast of 115 announced on 15 November was based on assumed 10-year 5year, and 2-year US Treasuries yields of 2.5, 1.75, and 1.25, respectively, as of June 2017. However, and as we have repeatedly mentioned, a further overshoot is possible, depending on the degree of autonomy for the macropolicy Mr. Trump has committed to. rdquo ldquoOur economist team has further raised the US economic growth forecasts, to 3.0 for 2017 and 3.3 for 2018. They state that in the near term, growth will likely be considerably above 4 on a quarterly basis, and could reach 5 for 12 quarters. He even says that these forecasts are conservative, and that if they prove incorrect US GDP would be on course to top our expectations. rdquo ldquoOur US interest rate strategist has raised their US Treasuries yield forecasts to 3.60, 2.75, and 1.30 (same maturities as above) as of June 2017. As of 15 November, we assumed a rapid rally driven by the Trump market and set our USD/JPY forecast at 115 based mainly on five-year yield. However, the scenario that these new US yield forecasts could materialize suggests the USD/JPY to top 120 (although we have not yet officially revised our USD/JPY forecast).rdquo ldquoThis week, we look for the BoJ Tankan business conditions DIs (to be announced on 14 December) to show some improvement following the Trumpdriven market rally, which would confirm risk-friendly market sentiment. The FOMC is expected to decide on a rate hike on 14 December, and this would also be a clear support for the USD/JPY. However, even this rate hike by the Fed does not look particularly important for current USD/JPY trading. rdquo ldquoThe market has already factored in several rate hikes over the next 1-2 years, so this week39s anticipated hike is only a small step. When looking at the USD/JPY over the next few months, we need to consider both an overshoot and a correction following the rapid rally. However, the trend is clearly upward. rdquo 08:29 NZD/JPY pair should head towards the next resistance at 83.40 - Natixis Research Team at Natixis suggests that the NZD/JPY outlook remains favourable, as an ascending channel remains in evidence in the daily chart and an upward bubble is still developing in the weekly chart. ldquoUnder these conditions, the pair should head towards the next resistance at 83.40 (upper bound of descending channel in place since December 2014).rdquo ldquoA breakout above this resistance would instil new upward momentum, opening the way for a lasting rebound towards 84.70 (61.8 Fibonacci retracement of 94.08-69.04 downward wave from December 2014 to June 2016) before 86.30 (upper band of monthly Bollinger).rdquo ldquoTake advantage of any pullbacks towards 80.70 to buy the NZD/JPY, with as major target 86.30 (setting the stop loss below 79.40).rdquo 08:25 Oil: The first cut is not always the deepest - ANZ Philip Borkin, Senior Economist at ANZ, notes that in a surprise move, Saudi Arabia announced its intention to cut oil production even more than what was agreed with its OPEC counterparts last month. ldquoFollowing hot on the heels of an announcement by a number of non-OPEC countries over the weekend (11 in total, including Russia and Mexico) to cut production by 558k barrels per day, the Saudi oil minister stated that ldquoI can tell you with absolute certainty that effective January 1 wersquore going to cut and cut substantially to be below the level we have committed to on November 30.rdquo Clearly all eyes will be on how oil prices take this latest news, but one would have to think it will be price supportive, which could therefore have wider implications for the likes of the broader commodity picture, commodity currencies, energy stocks and market-based measures of inflation expectations to start off the week. rdquo ldquoBut how significant a rally are we talking Well the fact that 1) the oil market still has a large inventory overhang to work through 2) shale oil producers continue to wait in the wings for any decent price bounce and 3) history has taught us to be a little skeptical given non-compliance to such agreements, it is hard to see oil prices surging meaningfully higher just yet. rdquo 08:24 Russian OilMin Novak: Oil prices between 50-60/bbl comfortable for Russian budget Russian energy minster Novak is on the wires now, via Reuters, noting that the oil-price range between 50-60/bbl is in line with the Russian budget. 08:19 EUR/USD consolidates the Asian recovery ahead of FOMC week The recovery in the EUR/USD pair from near 2016 lows lost legs just shy of 1.0570, with the bulls now struggling hard to retain the bids as we progress towards the European opening bells. EUR/USD back above daily pivot at 1.0544 Currently, EUR/USD turns positive near 1.0560, although finds fresh sellers lurking just ahead of the last. The main currency pair paused its recent losing streak and jumped back on the bids amid an extended phase of bullish consolidation seen in the greenback across the board, after last weekrsquos rally in light of monetary policy divergence tilting in favor of the Fed and the buck. The recovery in the major looks fragile and short-lived as the US dollar is expected to rule the roost going forward, with a 25bps Fed rate hike priced-in by investors. While markets also continue to digest the dovish guidance provided by the ECB last week. Ahead of the FOMC decision due in the second-half of this week, markets will look forward to the German ZEW sentiment and US retail sales data for fresh incentives on the pair. EUR/USD Technical Levels In terms of technicals, the pair finds the immediate resistance 1.0607 (5-DMA). A break beyond the last, doors will open for a test of 1.0621 (20-DMA) and from there to 1.0642 (10-DMA). On the flip side, the immediate support is placed at 1.0526 (5-day low) below which 1.0503 (multi-month low) and 1.0456 (March 2015 low) could be tested. 08:16 USDCAD: Buckle up amp get long - TDS Mazen Issa, Senior FX Strategist at TDS, suggests to enter a long USDCAD position enter at 1.3150, target of 1.3650, stop-loss of 1.2900. ldquoSince USDCAD failed to sustain a break above 1.3600 ( 50 Fibo level from 2016 high/lows) on Nov 15th, price action has been notably heavy. We have long viewed the risks around USDCAD tilt higher from a fundamental perspective, but augured for patience despite attractive valuations. We think that turning point is near. rdquo ldquoThe 1.3100/50 area has acted as a key pivot zone for USDCAD. We think a re-test of this area offers a cleaner and more attractive technical entry point reinforced with solid trend-line support to re-establish firm USDCAD longs. While the CAD has been one of the better contained currencies within the G10 complex since the US electionmdasha point that should not be dismissedmdashwe think it will be difficult for the CAD to detether itself from a firm USD backdrop. rdquo ldquoWhile not our base case, we think that another BoC cut remains a non-trivial risk in 2017, and one that could receive consideration by mid-year. Currently, the OIS market is pricing in a modest probability of a rate hike by Q3 next year ( 7bps), which we strongly lean against, though we note a near-term catalyst to change front-end dynamics remains elusive for now. Indeed, our economists apply a subjective probability of 30-40 of a cut next year as the risks to the growth outlook remain titled to the downside: the export rotation has been uneven, business investment remains a disappointment, housing market imbalances persist and we judge the fiscal multiplier assumed by the BoC as too high. rdquo ldquoThe recent BoC statement noted that economic slack is wide in Canada compared to the US. To us, this explicit acknowledgement by the BoC cements the idea that policy will diverge for some time. rdquo ldquoOil prices are expected to grind towards 60/bbl over 2017. We think a lot of lsquogood newsrsquo post-OPEC deal is already in the price and that a Trump Presidency should keep UST yields elevated. Against this backdrop, we expect G10FX to show greater deference to rate spreads. USDCAD is no exception though a slightly higher profile for oil should limit the overshoot implied by rates. rdquo ldquoThe upcoming Fed meeting is expected to reveal a cautious tone/dovish hike. We would use this as an opportunity to scale into a USDCAD long as January nears, which tends to be the best performing month (even when the January 2015 surprise hike is excluded).rdquo 08:00 Japan Machine Tool Orders (YoY) increased to -5.6 in November from previous -8.9 07:32 USD/CNY regains 6.90 as USD strengthens ahead of FOMC The Chinese currency resumed its decline versus its American counterpart on Monday, after a minor-recovery staged last Friday, as the greenback advanced sharply against its six major peers in anticipation that the Fed will hike rates by 25bps this Thursday. A trader at a big Chinese bank in Beijing, quotThe yuan faces depreciation pressure as the US dollar strengthened ahead of the expected rate hike this week. The yuan faces depreciation pressure as the US dollar strengthened ahead of the expected rate hike this week. quot The Yuan weakened per dollar also as the Chinese central bank, PBOC, lowered the Yuan fix 6.9086, 114 basis points lower than Fridayrsquos fix of 6.8972. Meanwhile, the USD/CNY pair almost unchanged at 6.9077 at mid-day, flirting with daily highs of 6.9085. 07:28 CAD: One more leg down toward 1.3080 - BBH Research Team at BBH notes that the Canadian dollar was the strongest of the majors, gaining 2 against the US dollar. ldquoSteady oil prices at elevated levels and the fact that Canada39s discount on two-year money finished at the lows for the week may have been contributing factors. Typically, the Canadian dollar performs well in a strong US dollar environment. Last month, the US dollar was repulsed after testing the 50 retracement objective of the down move since the multi-year high was set at the start of the year a little below CAD1.4700.rdquo ldquoTechnical indicators are getting stretched, and the Canadian dollar strengthened six of the past seven sessions. If the move is not exhausted, there may be one more leg down toward CAD1.3080. A move back above CAD1.3220 may be the first sign that the US dollar has bottomed. rdquo 07:15 Another repatriation wave into the USD - Westpac The US presidential election has given fresh impetus to another repatriation tax holiday for US corporate earnings held offshore notes Research Team at Westpac and they expect that the US equities and the USD will be the main beneficiaries, mostly in 2018. ldquoThe incoming Trump administration, aided by a Republican-controlled Congress, is set to pursue broadbased US tax reforms. A major piece of any tax reform will be how to deal with 2.6trn in accumulated profits held offshore by US corporates. Any changes to the US tax code on this front could give a significant boost to US equities and the USD. rdquo ldquoUnlike most advanced countries, the US code taxes profits earned by the foreign subsidiary of US companies. However the tax code also allows US corporates to indefinitely reinvest overseas earnings offshore and defer paying the full 35 corporate tax rate on these profits until they are officially repatriated back the US, through a dividend or otherwise transferred back to the US parent. To avoid paying the tax US corporates have hoarded substantial sums overseas, about 2.6trn. rdquo ldquoThe US presidential election has given fresh impetus to a repatriation tax holiday as part of a broader overhaul of the US tax system. The exact timing is uncertain but itrsquos reasonable to assume that legislation will be passed in late 2017 and implemented in 2018.rdquo ldquoThe potential boost to the economy is questionable, even if the legislation requires that the funds be earmarked for hiring and investment like 2004. Payrolls and investment were solid in 2005 during the repatriation tax holiday but they were solid in 2004 and 2006 too. The current 2.6trn hoard overseas is highly concentrated in the tech, energy and pharmaceuticals industries - industries that already enjoy more free cash than they know what to do with. In any case, creative structures allow US companies to regularly access these offshore profits. For example some corporates such as Apple engage in ldquosynthetic repatriationrdquo borrowing in US capital markets against their overseas holdings to fund share buy backs and avoid paying the 35 tax. rdquo ldquoStocks will be the main winner. As in 2005, repatriated earnings are likely to be used to fund share buybacks. rdquo ldquoThe USD should be a big beneficiary too. About 30 of the stock of US earnings offshore was repatriated in 2005. Applying a similar ratio to todayrsquos 2.6trn hoard implies a hefty 780bn in repatriation. But a substantial majority of that is probably already denominated in USD. Company filings from Apple and Microsoft, the two largest holders of offshore earnings show that 80 of their combined offshore earnings are maintained in USD securities. rdquo ldquoEven so, 80 of earnings held in USD still implies a hefty 155bn in corporate demand for the USD. That is negligible compared to daily FX turnover but nonetheless represents yet another positive for the USD which is already enjoying solid support from increasing yield support and heightened EU political tail risks. The most vulnerable currencies appear to be EUR, CAD, GBP and CHF. rdquo ldquoBeyond that there could be longer term ongoing benefits for the USD. A potentially significant decline in the US corporate tax rate from 35 to 15 (Trump39s plan) or 20 (the House Republican plan) would reduce the incentive to hoard cash overseas, especially if the House Republican plan is adopted. Their policy calls for a one-time repatriation tax and then a shift to a quotterritorial systemquot of taxation, ending the US practice of taxing global earnings permanently. rdquo 07:10 USD/JPY stalls correction, re-takes 115.50 The US dollar regained poise versus its Japanese counterpart in the late-Asian trades, sending USD/JPY back higher towards multi-month highs of 115.62. USD/JPY bounces-off daily S3 support The dollar-yen pair stalled a brief downside correction from fresh 10-month highs, as the bulls fought back control amid resurgent USD demand in a risk-friendly market environment, triggered by oil-price rally and bets over an imminent Fed rate hike this week. Earlier on the day, the yen staged a tepid-recovery, knocking-off USD/JPY to 115.15 lows, in response to BOJ taper and tightening chatter. While upbeat Japanese core machinery orders also offered some respite to the yen bulls. The spot is last seen changing hands at 115.51, up 0.10 on the day. USD/JPY Technical levels to watch The major finds immediate resistance at 115.62 (multi-month high). A break above the last, the major could test 116 (zero figure) and 116.50 (psychological levels) beyond the last. While to the downside, the immediate support is seen at 115 (round number) next at 114.77 (5-DMA) and below that at 114.29 (10-DMA). 07:09 JPY and GBP losing steam against the USD BBH Research Team at BBH notes that the last session was the first since February that the US dollar remained above JPY114.00 and in fact, it made a new 10-month high near JPY115.30. ldquoThe JPY115.60 area corresponds to a 61.8 retracement of the dollar39s decline since reaching almost JPY126 in June 2015. Above there is initial potential toward JPY116.00-JPY116.20. The technical indicators have not confirmed the new dollar highs, but the momentum is strong. Initial support is seen near JPY114.50.rdquo ldquoWhile the yen was the weakest currency last week, shedding almost 1.5, sterling was just behind it with a 1.25 decline. Sterling snapped a two-week advance. Disappointing data, broad dollar strength, and the UK parliament39s support for the government39s timetable of triggering Article 50 took a toll. Early in the week, sterling had reached 1.2775, its highest level since just before the flash crash, but just shy of the 100-day moving average ( 1.2795). It has not traded above that moving average since the referendum. The 1.25 area offers initial support, and a break could see 1.24 in short order. A break of 1.23 would likely signal the end of the two-month correction. The RSI has turned down. The MACDs and Slow Stochastics may rollover near week. rdquo 07:03 NZD/AUD to target the 0.9700 area during the weeks ahead - Westpac NZD/AUD cross retains upward momentum and targets the 0.9700 area during the weeks ahead, expects Imre Speizer, Research Analyst at Westpac. ldquoThat area marked a peak in July and should at least provide some resistance to this rally. rdquo ldquoThe AUD has underperformed the NZD recently, despite AU commodities easily outperforming NZrsquos. Part of the reason is undoubtedly skepticism that AU commodities can sustain the run. Another is the recent run of disappointing AU economic news. rdquo ldquoWe suspect the weak Q3 GDP result last week (-0.5 qoq) was a rogue print, with housing construction and public infrastructure sure to rebound. Export data has so far lagged the surge in commodity prices so we should get some good news on that front too. rdquo ldquoAfter the last weekrsquos dismal GDP data, any clues on a better Q4 will be watched closely. This week on Tue itrsquos Nov NAB business confidence, and on Wed we see Dec consumer sentiment from Westpac/MI but the market focus will be Nov labour data (Thu). Another poor jobs reading would reinforce the gloomy domestic theme. rdquo ldquo 3 months: Eventually we see NZD/AUD starting to reflect the outperformance of AU commodities as well as better economic data ahead. We expect a retest of the 0.9300 area which was visited a number of times during the second half of 2016.rdquo ldquoOur fair value model suggests the cross is around 10 overvalued at present, based on the movement to date in respective commodity prices and interest rates. Wersquore not expecting the cross to snap back to fair value anytime soon, since itrsquos been overvalued for much of this year, but it should at least start to move in that direction. rdquo 06:47 USD/CAD consolidates bearish gap amid 5 WTI rally The Canadian dollar keeps the range near two-month highs against its American counterpart in the late-Asian trades, with USD/CAD hovering ahead of 1.31 handle. USD/CAD dumped on Oil rally Currently, the USD/CAD pair is last seen exchanging hands at 1.3123, down -0.50 so far, having posted fresh two-month troughs at 1.3115 in early deals. The major opened with a bearish gap in Asia this Monday, as oil prices spiked over 4 after the Asian traders cheered the oil output cut deal between OPEC and non-OPEC deal was reached over the weekend. While Saudi Arabiarsquos commitment for aggressive cuts also added to easing oversupply worries, bolstering the bids for the black gold, and thus, eventually lifting the demand for the resource-linked Loonie. Oil is Canadarsquos top export product. The bearish momentum seen behind USD/CAD is also partly attributed to the subdued trading activity in the US dollar against its main competitors. Looking ahead, the major will get influenced by the sentiment around oil markets and upcoming US macro releases due on the cards this week. While the main market moving event for the spot this week remains the FOMC rate decision. USD/CAD Technical Levels To the upside, the next resistances are seen near 1.3157 (daily R1) and 1.3172 (5-DMA) and from there to 1.3200 (round number). To the downside, immediate support might be located at 1.3100 (round figure) and below that at 1.3085 (200-DMA) and at 1.3050 (Oct 18 low). 06:35 EUR: Bounces from the 1.05 level appear to be getting more shallow - BBH Euro bounces from the 1.05 level appear to be getting more shallow as technical indicators are not particularly helpful given the sharp swings in both directions in recent days, notes Research Team at BBH. ldquoThat said, the euro39s squeeze up to almost 1.0875 likely completed the upside correction we had been anticipating. We expect the 1.05 support area yield, with the euro heading toward 1.0430-1.0450 before corrective pressure emerges again. If the 1.05 is not broken, momentum traders will be sorely disappointed, and a bounce back to 1.07 would not surprise. rdquo 06:33 Japan Tertiary Industry Index (MoM) climbed from previous -0.1 to 0.2 in October 06:32 NZD/USD to remain in a 0.7000-0.7220 range during the week ahead - Westpac After a brief pop above 0.7200, NZD/USD hasnrsquot made any further headway despite a continuing stream of good economic news as noted by the Imre Speizer, Research Analyst at Westpac. ldquoThat is because the US dollarrsquos strength has trumped NZ fundamentals. We expect NZD/USD to remain in a 0.7000-0.7220 range during the week ahead, with the Fed meeting posing upside risks. rdquo ldquoNZrsquos event calendar this week is unlikely to ruffle the NZD, consisting of second-tier data only. We have Q3 manufacturing activity, Q3 building work, manufacturing PMI, ANZ consumer confidence, and REINZ housing market. The following week we get the next GDT dairy auction which will be watched given WMP has risen 90 since Feb. Futures pricing is predicting a 2 rise, which may not be enough to get a NZD response given last weekrsquos 4 did not. Indeed, while there is a relationship between dairy prices and the NZD over the long run, it is weak at best over the short run. rdquo ldquoThere is a political event of note. Last week saw the unexpected resignation of John Key as Prime Minister after eight years in office, and following a caucus vote the previous Deputy Prime Minister Bill English takes the reins from today. Mr English has been Finance Minister for the past eight years, and is likely to maintain his relatively conservative approach to fiscal management. But the loss of a fairly popular political leader in the run up to an election does add an additional layer of uncertainty to the outlook. And at the margin, it has raised the odds of a snap election. rdquo ldquoHowever as noted above, NZD/USD is mostly a US story at present. which means we will be watching US events closely for NZD/USD clues during the week ahead. On that score, the highlight event will be the Fed meeting on 14 Dec, with a hike a near certainty (and more than fully priced). The statement should be balanced, rather than hawkish, and officials are unlikely to lift growth or dot plot projections until more details on Trumprsquos tax and infrastructure plans emerge. If the US dollar pauses or pulls back in response to the FOMC announcement, then NZD/USD will rally. rdquo ldquo 3 months: We expect the US dollar to eventually resume its uptrend as the US economy improves further and US interest rates rise further, and the FOMC membership becomes more hawkish. That should eventually cause NZD/USD to decline to 0.70 or lower. rdquo 06:26 USD: Finishing the year on a firm note - BBH Research Team at BBH notes that the US dollar is finishing the year on a firm note as i t rose to a 10-month high against the yen before the weekend while the euro remains within spitting distance of the bottom of its two-year range near 1.05. ldquoOver the past month, dollar pullbacks have been generally shallow and brief. rdquo ldquoThis week39s FOMC meeting is the last big event of the year. The dollar may continue to be well supported ahead of the meeting where a rate hike is fully discounted. The Fed officials may revise up growth and inflation forecasts, and still not take into account the extent of fiscal stimulus that may be delivered. The President-elect39s team has indicated the initial economic focus will be on trade, not taxes or stimulus. rdquo ldquoNevertheless, investors anticipate both fiscal stimulus and a more hawkish configuration at the Federal Reserve. At the same time, the ECB will be expanding its balance sheet by 780 bln euros next year, and the BOJ39s extraordinary monetary policy is set to continue, augmented by modest fiscal stimulus. Also, while many emerging-market central banks have been reducing their Treasury holdings to support their currencies, private sector demand has been strong, with European investor interest reported. Americans appear to be liquidating some of their holdings for foreign bonds. Foreign investors have returned to the Japanese equity market, but it appears to be mostly on a currency-hedged basis. rdquo ldquoWe had anticipated the US Dollar Index to fall to 99.70 and possibly 99.00. It recorded a low a little below 99.45 in the knee-jerk response to what appeared at ECB tapering. It quickly rebounded, and before the weekend was testing a short-term down trendline drawn off the November 24, November 30, and December 5 high. It was found near 101.55 before the weekend and 101.30 at the end of next week. The speed of the Dollar Index 39s recovery means that MACDs and Slow Stochastics have not crossed higher to generate new buy signals, though they may turn early next week. Remember, the 101.80 area is the 61.8 retracement of the decline since from the 121.00 level seen in July 2001.rdquo 06:22 BOJ tapering sees bond buying slow toward 70 trillion yen - BBG Bloomberg carried an article this Monday, noting that the Bank of Japan (BOJ) technically have retained their target for the annual increase in government bond holdings at 80 trillion yen (699 billion), there are signs the buying may come in closer to 70 trillion yen. Data compiled by Bloomberg show, for the year so far, the BOJ bonding buying annualized is 71.7 trillion yen, versus 75.3 trillion over the same period last year. Chief market economist at Nomura Securities Co, quotThe BOJ is not going to need to purchase 80 trillion yen to keep the yield curve under control. At some point in time they are going to drop the language on 80 trillion yen. quot 05:59 Nikkei back in positive territory on YTD basis Japanrsquos Nikkei index is back into the positive territory on year-to-date basis. The amazing turnaround has been single handedly fueled by the drop in the Japanese Yen. The index had dropped from the January high of 18,951 to hit a low of 14,864 in June. During the same time period, Dollar-Yen dropped from 122.00 to 99.00 levels. However, the USD/JPY pair turned higher in the second half of this year. The uptrend gathered pace after Trump victory. The spot is now eyeing 115.00 levels. Consequently, the Nikkei index rose to a fresh 2016 high of 19,281 levels. 05:45 Ten-year Treasury yield rises to highest since June The yield on the benchmark Ten-year treasury yield rose to 2.497, its highest since June 2015 as oil rose to 16-month high on back of the first global oil deal since 2001. At the time of writing, the 10-yr yield traded at least 2.5 basis points higher on the day. Meanwhile, at the short-end of the curve, the 2-year yield rose 1.6 basis points to 1.149. Oil rallied 5 in Asia after the non-OPEC members cut 558K barrels per day. In response, Saudi Arabia it stands ready to cut more than what was agreed on November 30. The resulting risk-on in the markets reduced demand for the treasuries. Furthermore, rally in oil is also likely to push up inflation expectations, which too is supporting the gains in the treasury yields. 05:42 BOJ may soon have to think about tightening for the first time since 2007 - WSJ The Wall Street Journal (WSJ) ran a story over the weekend, noting that Japanese central bank the BOJ may soon have to resort to tightening for the first time since 2007 in wake of higher inflation expectations from the Trumprsquos presidency. One of central bankingrsquos most aggressive easersmdashthe Bank of Japan (BOJ)mdashmay soon have to think about tightening for the first time since 2007. In a Trump-fueled turnaround, the BOJ may have to lift its 10-year government-bond target from the recently set zero Triggered by expectations that his policies would boost U. S. growth, inflation and interest rates So far, that has been good for Japan, where the weaker yen is brightening exporters39 prospects, helping send Tokyo stocks to 11-month highs 05:30 NZD/USD rebounds to 50-DMA, focus shifts to China data dump The NZD/USD pair extends its recovery into mid-Asia, and now looks to take-out 50-DMA barrier located at 0.7146 amid a broadly subdued US dollar and rally in oil prices. NZD/USD supported at daily S1 Currently, the NZD/USD pair trades 0.11 higher at 0.7143, flirting with session tops reached at 0.7146 in the last hour. The Kiwi is on a roll higher, extending its winning streak into a fourth day today, having staged a solid recovery from a dip below 0.70 handle. The NZD/USD pair remains well bid as investors take the yield-advantage amid a better sentiment towards risk assets, in wake of an oil output cut deal struck between the OPEC and non-OPEC producers over the weekend. However, it remains to be seen whether the major can sustain the ongoing bullish run, as focus now shifts towards tomorrowrsquos Chinese data dump and upcoming FOMC interest rates decision, which is expected to have a significant impact on NZD/USD. NZD/USD Levels to consider To the upside, the next resistance is located at 0.7203 (100-DMA), above which it could extend gains to 0.7226 (multi-week high) and from there to 0.7250 (psychological levels). To the downside immediate support might be located at 0.7109 (200-DMA) and from there to at 0.7091 (20-DMA), below which 0.7065 (Dec 5 low) would be tested. 05:16 Moodys on NZ: Half-year economic amp fiscal update for 2016-17 demonstrates strong public finances The US-based ratings agency, Moodyrsquos Investors Service, published its latest report on the Government of New Zealand . titled lsquoGovernment of New Zealand (NZ): Strong Public Finances, Robust Economic Growth Bolster Sovereign Credit Profilersquo on Monday. Key Points from the report: Government forecasts average annual GDP growth of 3.5 over 2017 and 2018, is slightly higher than Moody39s forecast and points to some downside risk to the revenue projections New Zealand will remain among the fastest growing economies in Moody39s Aaa-rated universe The half-year economic and fiscal update (HYEFU) for 2016-2017 demonstrates strong public finances, providing the government with significant financial flexibility to face negative shocks such as the Kaikoura earthquake Moody39s expects policies and reforms that foster economic growth and maintain sound public finances to remain a key focus under a new leadership 05:16 GBP/USD snaps four-day losing streak The GBP/USD pair snapped a four-day losing streak in Asia amid oil-led risk-on action in the markets. The pair ticked higher from the session low of 1.2570 but failed to chew trough offers around 1.26 handle. The British Chamber of Commerce (BCC) lifted 2017 GDP forecast to 1.1 from the previous figure of 1.0. Meanwhile, 2018 GDP forecast was revised lower to 1.4. However, the markets did not take note of the BCC forecasts and remain at the mercy of the oil price action, given the empty economic calendar across the globe. GBP/USD Technical Levels The spot was last seen trading around 1.2580 levels. A break above 1.26 (psychological level hourly 50-MA) would expose the hourly 200-MA level and hourly 100-MA level of 1.2617 and 1.2636 respectively. A violation there could yield re-test of 1.2704 (hourly chart hurdle). On the lower side, breach of Asian session low of 1.2570 would expose support at 1.2548 (Aug 12 low), under which the losses could be extended to 1.25 (zero figure). 05:01 Indicators signaling USD/CAD is oversold While intraday moving averages point at a continued USD/CAD depreciation, the latest momentum readings raise the odds of a minor throwback. USD/CAD appears primed for a pullback, at least towards overhead resistance established by the 50-period simple moving average. Consistent declines locked RSI below the 50 mark for most of the last 3 weeks. More noticeable was the recent sell off which led the oscillator plunge below its 25 level. This showed that market participants are keen on selling. In the context of a prolonged down trend, the 4-hour RSI looks now very heavy on the sell side so it could be prone to a squeeze back higher. However, the risks are but still skewed to the downside. 05:01 USD/JPY retreats from 10-month tops, but keeps 115.00 Having peaked at 10-month highs at Tokyo open, the USD/JPY pair took a breather and came under fresh selling pressure over the last hour amid a minor-correction seen in the US dollar across the board. USD/JPY trades above all major DMAs The dollar-yen pair is seen retracing a part of the intraday rally to new ten-month tops, largely on the back of stalled US treasury yields buying, which triggered a corrective slide in the US dollar against its main peers. Also, the major tracks a minor-retreat in the Japanese stocks, with the Nikkei 225 index now reverting towards daily lows. Calendar-wise, we had the Japanese core machinery data, which came in much stronger-than expected, and therefore, the upbeat Japanese data also could have helped rescue the JPY bulls. However, the retreat remains restricted amid persisting risk-on sentiment, spurred by weekendrsquos OPEC and non-OPEC oil output deal agreement. While expectations of Fed tightening this week also keeps the sentiment buoyed around the USD/JPY pair. The spot is last seen changing hands at 115.25, reversing from 10-month highs of 115.62, down -0.10 on the day. USD/JPY Technical levels to watch The major finds immediate resistance at 115.62 (multi-month high). A break above the last, the major could test 116 (zero figure) and 116.50 (psychological levels) beyond the last. While to the downside, the immediate support is seen at 115 (round number) next at 114.77 (5-DMA) and below that at 114.29 (10-DMA). 04:48 OPEC s global producer pact could signal oil market metamorphosis Platts SampP Global Platts, the leading independent provider of information and benchmark prices for the commodities and energy markets, believes ldquojoint output cut pact highlights a show of strength and unity across global producers that could mark a new era in cooperation aimed at bringing stability back to global oil marketsrdquo. Buoyed by the non-OPEC deal, Saudi Arabia said it could cut below the psychological figure of 10 million barrels per day. Platts says, ldquoSaudi is making it clear to the global market: the kingdom wants the output deal it negotiated with major producing countries to stick, even if it has to cut production more than it already committed to. rdquo 04:45 UKs BCC: UK s current GDP growth rate won t last BBC News The UKrsquos British Chambers of Commerce (BCC) upgraded its 207 growth forecasts for the UK economy, although warned that higher growth prospects are unsustainable in wake of uncertainty over the UK39s EU relationship. ldquoThe business body expects 2.1 GDP growth this year, up from the 1.8 it forecast just three months agordquo ldquoBut uncertainty over the UK39s EU relationship and higher inflation will quotdampen medium term growthquot ldquoIt expects UK GDP to grow 1.1 next year, and 1.4 in 2018rdquo ldquoHowever, its 1.1 forecast for next year would mark the weakest annual rate of growth for the UK since the 2008 financial crisisrdquo 04:38 AUD/USD lifted by Oil deal-driven risk-on The AUD/USD pair staged a solid comeback, after a weaker Asia opening, now taking the rate beyond the mid-point of 0.74 handle amid a risk-friendly market environment, underpinned by weekendrsquos oil output cut deal. AUD/USD recovers to test 10-DMA at 0.7455 Currently, the AUD/USD pair trades 0.11 higher at 0.7456, retracing from session tops placed just ahead of 5-DMA at 0.7464. The overnight rally in oil prices after markets cheered an oil output cut finally reached between the OPEC and non-OPEC producers on Saturday, provided some impetus to the resourced-linked AUD. Moreover, oil deal-induced risk-on trades across the markets also collaborated to the bullish sentiment around the higher-yielding emerging market currency, while the US dollar remains broadly subdued. Further, analysts at Goldman Sachs lifted copper prices forecasts for next year, which also helped the Aussie to take on a minor-recovery from a brief dip to 0.7430 witnessed in the opening trades. However, further upside looks limited as markets turn cautious stepping into the FOMC week, with a 25-bps hike already priced-in by investors. AUD/USD Levels to watch The pair finds the immediate resistance at 0.7505 (Nov 17 high) above which gains could be extended to the next hurdle located 0.7575 (Nov 16 high) and 0.7600 (zero figure). On the flip side, the immediate support located 0.7400 (round number). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7385 (key support) and below that at 0.7366 (Dec 1 low). 04:36 Goldman Sachs upgrades Iron Ore and Copper forecasts Iron ore rally post-Trump victory has caught most investment banks on the wrong side of the trade. The metal now trades around 80 per tonne, which is significantly higher than the most calendar 2017 forecasts. Goldman Sachs has hiked its three-month forecast to 65 per tonne. The investment banker has also revised its copper forecast for three months, six months, and 12 months higher to 5800, 6200 and 5600 respectively. 04:23 Goldman Sachs: OPEC, non-OPEC announced oil cuts smaller than expected Analysts at Goldman Sachs present their afterthoughts after an output cut deal was finally reached between the OPEC and non-OPEC producers over the weekend. Key Headlines via Bloomberg: Announced cuts are smaller than expected Implementation remains uncertain Nevertheless, the agreement removes the uncertainty surrounding participation of non-OPEC nations to OPEC reduction Saudi Arabia will help achieve a normalization of inventories. even if it requires a larger unilateral cut The cuts support the bank39s H1 (2017) WTI price forecast of 55/barrel GS bases this forecast on effective 1m b/d cuts Greater compliance to the 1.6 target is therefore an upside risk to price forecast ldquoBetter compliance than bank expects would initially lead to higher prices -- with full compliance adding 6/bbl to its price forecast. but then there would be a bigger producer responserdquo 04:15 China officials: Target for economic growth next year should be 6.5 The State Information Center, an official think tank affiliated with Chinarsquos National Development and Reform Commission (NDRC), noted its expectations for the Chinese growth targets in an article published in the China Securities Journal. Key Quotes via Reuters: ldquoThe State Information Center says the target for economic growth next year should be 6.5 and exceeding that level is very likelyrdquo quotIn 2017, China39s economic operations will need to intensify efforts to alleviate deep-seated contradictions and structural problemsrdquo 04:14 Further gains in USD contingent on meaningful fiscal stimulus Goldman Sachs The Dollar index has already rallied from 96.00 levels to 102.12 the highest level since 2003 on the back of heightened odds of a steeper Fed rate hike path in 2017. Research team at Goldman Sachs believes the greenback could strengthen further if there is meaningful fiscal stimulus in the US economy, which is already close to full capacity. Goldman sees Trade Weighted Index (TWI) USD to appreciate close to 7 against the majors over the next 12 months. 04:08 NZIER: Forecasters have revised up their NZ growth and inflation forecasts The New Zealand Institute of Economic Research (NZIER) published a forecast from economists for the NZ economy on Monday, with the forecasts for growth and inflation revised upwards. Forecasters have revised up their growth and inflation forecasts Annual inflation is expected to reach the RBNZ39s 2 mid-point target by March 2019 Continued strong migration-led population growth expected to boost household spending and residential construction further over the next few years Businesses are also feeling more confident, and are more optimistic about investment and hiring Underlying trend improvement in employment demand Unemployment rate expected to fall to 4.6 by March 2018 Skills shortages becoming more apparent, thus wage growth has been revised up Forecasts range from 1.7 to 3.2 for the year to March 2020 04:01 USD/NOK hints at dip buying The hourly 50-period SMA broke through the slower 200-period SMA, adding credence to the recent bullish USD/NOK profile. If USD/NOK spot falls closer to the level where the moving averages crossed, then buyers might see it as an opportunity to reenter. Furthermore, a convincing break through the 50 SMA signals a neutral tone, shifting negative below the 200 SMA. 03:57 EUR/USD headed for turmoil on FOMC and 2017 s political outlook EUR/USD is lower again in Asia after another bazooka from the ECB last week in respect to their QE extensions, coupled with concerns over the Italian and European banking crisis that could be the New Year event instead of China this time around, both are supporting the greenback as a safe haven and a bearish outlook for the single currency, as funding currency. Analysts at Rabobank, in their recent report, said in a summary, quotRecent economic data have been in line with the Fed39s expectations. What39s more, markets have responded positively to the outcome of the elections and are pricing in a 100 probability of a December hike. So unless there is a major disruptive event between now and December 14, the FOMC will raise its target range for the federal funds rate to 0.50-0.75.quot Fed December hikes: an annual thing - Rabobank In respect to the ECB, they are committed to their asset purchases programme and the dovish tone of the Draghi has fuelled speculation for parity vrs the dollar. It could be just as well due to the onset of political uncertainties taking fold next year in Euroland. Considering Draghi has extended the QE programme, albeit at a slower pace, he has done so until Dec and 2017 which means there will be plenty of cheap money around to soften the impact of German elections and subsequent volatility in the autumn of 2017. quotOn the assumption that populist parties do not prevail in next spring39s Dutch and French election, we are forecasting EUR/USD at 1.10 on a 12 mth view, quot offered analysts at Rabobank. Meanwhile, spot is currently trading at 1.0551 EUR/USD after a retreat from 1.0875 recently on the ECb decision39s initial spike, before a breakdown through the 1.0620 and the 20 day ma with focus now set on the recent low at 1.0505 and 1.0467, the March low. quotThis remains a major break down point to parity, quot explained analysts at Commerzbank. EUR/USD analysis: Yellen, Trump, and FED39s future up next 03:53 Asian stocks rally on oil deal amp Saudis whatever it takes moment Asian stock markets are having a good time this Monday morning on account of the first global oil deal since 2011 and Saudirsquos readiness to do lsquowhatever it takesrsquo to rebalance the oil markets. Japanrsquos Nikkei gained 1.3 or 247 points to 19,244. The weakness in the Japanese Yen is also driving the stock prices higher. Australiarsquos SampP/ASX 200 rose 0.34 or 18 points to 5580 levels. Oil jumped to its highest level since July 2015 after the non-OPEC producers agreed to cut output by 558K barrels per day. Following the non-OPEC deal, Saudi said it could do more cuts beyond what the level decided on November 30. The data calendar is light across the globe. Hence, oil remains at the center stage of the financial markets. 03:24 Fed December hikes: an annual thing - Rabobank Analysts at Rabobank said that it seems like we can add the Fedrsquos annual hike to the calendar as a recurring event in December. quotThe FOMC launched its hiking cycle in December 2015, promising to hike four times this year, but instead we are heading for another single hike in December. The minutes of the FOMC meeting of November 1-2 confirmed the now widely held view that the Fed will hike in the final month of the year. Members generally agreed that the case for a hike had continued to strengthen. But a majority of members judged that the Committee should, for the time being, await further evidence of progress toward the Fedrsquos objectives. Most participants expressed a view that it could well become appropriate to raise the target range for the federal funds rate relatively soon. Some participants noted that recent Committee communications were consistent with a hike in the near term or argued that to preserve credibility, such an increase should occur at the next meeting. Fed Chair Yellenrsquos testimony to the Joint Economic Committee of Congress on November 17 suggested that the outcome of the elections a week earlier had not changed the mind of the FOMC. Moreover, she stressed that waiting for further evidence did not reflect a lack of confidence in the economy. Rather, with the unemployment rate remaining steady this year despite above - trend job gains, and with inflation continuing to run below its target, the FOMC judged that there was somewhat more room for the labor market to improve on a sustainable basis than the Committee had anticipated at the beginning of the year. With respect to the impact of the election outcome on the Fedrsquos rate path she said that there was still a lot of uncertainty about fiscal policy next year and its inflationary consequences. Since Yellenrsquos testimony, Q3 GDP growth was revised upward to 3.2 from 2.9, while the Atlanta Fedrsquos nowcast for Q4 GDP growth stood at 2.6 on December 6. This is the pickup in growth that the FOMC was looking for in H2, after the disappointing 0.8 in Q1 and 1.4 in Q2. Whatrsquos more, the Employment Report for November showed that nonfarm payroll growth continued at a decent pace of 178K, and unemployment fell to 4.6 from 4.9. Finally, the PCE deflator ndash which is the Fedrsquos preferred measure of inflation ndash rose to 1.4 in October from 1.2 (year-on-year). So the economic data have passed the Fedrsquos three tests for a rate hike: a pickup in GDP growth, continued labor market improvement, and rising inflation. Whatrsquos more, after a very brief risk-off reaction, the financial markets have responded positively to the election of Donald Trump as the next President of the United States. In combination with Republican majorities in the Senate and the House of Representatives, markets are looking forward to a substantial fiscal policy stimulus boosting the economy. The probability of a December hike priced in by the futures markets has risen to 100. So unless there is a major disruptive event between now and December 14, the FOMC will raise its target range for the federal funds rate to 0.50-0.75. It remains to be seen whether the decision to hike will be unanimous. The September dot plot revealed that three participants did not expect to hike at all this year. However, not all participants have voting rights and the recent economic data ndash and the anticipated fiscal stimulus by the new administration ndash could persuade dovish voters. Given the upbeat sentiment in recent weeks, a dissent may not disturb the markets very much. However, if markets have a bad day on December 14, a dissent could make it worse. quot 03:24 Gold drops to lowest since February Gold is feeling the heat of the OPEC and non-OPEC oil output cut deal and the resulting rise in the oil prices. The metal was last seen trading 1155/Oz the lowest since February. Oil spiked more than 5 after the non-OPEC group headed by Russia agreed to cut output by 558K barrels per day. Buoyed the non-OPEC deal, Saudi said it may cut more than what was agreed on November 30. Oil rally is usually good news for the riskier assets. Consequently, investors are moving out of gold in Asia. Gold Technical Levels A break below 1142.97 (Mar 2015 low) would open doors for a sell-off to 1132.08 (Nov 2014 low). On the higher side, violation at the Asian session high of 1159.90 could yield a re-test of 1172.07 (61.8 of Dec 2015 low ndash July 2016 high). 03:16 PBOC sets USD/CNY at 6.9086 vs 6.8972 PBOC sets USD/CNY at 6.9086 vs 6.8972 03:10 USD/CNY fix projection 6.9156 from 6.8972 - Nomura Analysts at nomura offered their model1 projects for the fix. quotOur model1 projects for the fix to be 184 pips higher than the previous fix (6.9156 from 6.8972) and 151 pips higher than the previous official spot USD/CNY close of 6.9005. The basket implied change is 202 pips higher than the previous official spot USD/CNY close (6.9207 from 6.9005). 02:59 Russias Novak cheers global oil deal Russian Energy Ministry Alexander Novak, in an exclusive interview to Bloomberg, cheered the global oil deal and said he is satisfied with the current oil prices. Novak reportedly said on Sunday that oil prices could have dropped to 30-35 per barrel, if OPEC and non-OPEC countries had not struck an output reduction deal. 02:47 AUD/JPY isnt buying the oil surge AUD/JPY, the global risk barometer, is trading sideways despite the rise in oil prices to 16-month highs on the global oil deal. The cross clocked a high of 86.07 and was last seen trading just below 86.00 levels. Fridayrsquos high stands at 86.09. Oil prices spiked after OPEC and non-OPEC producers agreed to cut output for the first time since 2011. Oil rally usually bodes well for the risk assets. However, the lacklustre action in the AUD/JPY cross today could be suggesting otherwise. AUD/JPY Technical Levels A break below 85.73 (session low) would expose the downward sloping weekly 100-MA of 85.50, under which the losses could be extended to 84.33 (weekly 5-MA). On the higher side, acceptance above 86.00 could yield 86.70 (March high) and 87.00 (zero figure). 02:45 USD/JPY: better bid and about to get bidder for the 120 s USD/JPY has been a strong bid in risk-on markets while investors are backing the greenback as we head towards the end of the year and much uncertainty to come in 2017. The greenback is in demand as the world39s reserve currency while the Yen has been printed so much that it has diluted its safe-haven appeal given the weakness in the Japanese economy and divergence between the BoJ and Federal Reserve. Longer-term rate differentials (10Y spreads) continue to widen the yield gap of over 230bps last week represented the biggest yield gap for the USD since 2010. Fed funds futures continued to imply a 100 chance of a rate hike on 14 December, and two more rate hikes priced in for 2017. Fed preview: The second rate hike is coming - Commerzbank Investors are placing their money where they are predicting a better return, and that is the greenback and US stocks while bonds plummet and global yields rise in the face of reflation. Oil prices/demand and the Yen Also, worth noting, is that Japan is the world39s second largest net importer of fossil fuels and oil remains the largest source of primary energy consumption in Japan. The recent accord between non-OPEC members with OPEC members has seen a rally in oil prices at the start of this week that is not helpful to the ailing Japanese economy - a demand driven environment that this could well spark ahead of this week39s FOMC when full markets get going could weigh on the Yen further. Brent oil clocks 16-month high on first global oil pact The market has penetrated through the 115.41 key fibo level and we are in the sixth weekly decline in the Yen and we have penetrated the 200 week sma at 108.92, marching on through Feb 2016 highs and that reveals the 12039s and 2016 high of 121.68. 120.00/120.10 represents the 78.6 retracement of the move down from 2015. Break to the downside, on say the FOMC holding or a sell the fact on a hike could test the 114.80 level and 112.80 as the floor of the early Dec commencing channel support line. 02:22 Brent oil clocks 26-month high on first global oil pact Brent oil jumped to 57.50 itrsquos highest since mid July 2015 after the OPEC and non-OPEC producers on Saturday reached their first output cut deal since 2001. Non-OPEC producers led by Russia agreed to cut the output by 558K barrels per day. The cut is equivalent to the demand growth seen from China and India. Saudirsquos lsquowhatever it takesrsquo moment Buoyed by the non-OPEC deal, Saudi took a page out of ECB President Mario Draghirsquos book by stating it is ready to lsquodo whatever it takesrsquo ndash cut production below the level agreed on November 30hellip Even below the psychological figure of 10 million barrels per day. Consequently, oil benchmarks spiked in early Asia. Energy/Mining shares could rally Oil and Mining stocks across the globe are likely to cheer the first global oil deal since 2001. UKrsquos FTSE 100 may close-in on 7000 levels, while US indices could see another record high closing. Brent Technical Levels Brent was last seen trading around 56.60/barrel. A break above 57.70 (session high) would open doors for 58.55 (mid-Dec 2015 low). A major hurdle above the same is directly seen at 60.00. On the other hand, a breakdown of support at 56.00 (zero figure) could yield a correction to 54.29 (session low), under which a major support is seen directly at 51.80 (weekly 5-MA). 02:05 USD/CAD extends bearish gap as Oil spikes through 54 WTI USD/CAD has been offered on the back of the non-OPEC accord with OPEC members that came to fruition over the weekend. It was a slow reaction in the market, but eventually oil jumped on the back of the pledge to lift the value and prices of oil in a bid to support the economies that have been hit hard by the glut of oil that started over two years ago by the 13 non-OPEC members agreed to cut crude output by 558,000bpd. That volume is in addition to the 1.2 million barrels a day in cuts from OPEC members, and this is amounting to a total of almost 2 of global oil supply - Russia have pledge to cut by 300,000bpd. USD/CAD39s bearish trajectory is intact and has been one-way since late November, observed analysts at Scotiabank, explained that this shows no sign of stopping. quotShort-term trend momentum has strengthened and spot is heading for a test of the broader bull channel trend at 1.3090/00 that comes into focus. quot 02:02 United Kingdom Rightmove House Price Index (MoM) fell from previous -1.1 to -2.1 02:01 United Kingdom Rightmove House Price Index (YoY) declined to 3.4 from previous 4.5 01:55 New Zealand Visitor Arrivals (YoY) fell from previous 14 to 2.2 01:51 Japan Domestic Corporate Goods Price Index (MoM) came in at 0.4, above expectations (0.3) in November 01:51 Japan Domestic Corporate Goods Price Index (YoY) above expectations (-2.3) in November: Actual (-2.2) 01:51 Japan Machinery Orders (MoM) came in at 4.1, above expectations (1) in October 01:40 Oil: what a mover, to highest levels since July 2015 s glut sell-off from 56 Oil is much higher in early Asia on the back of the weekend news with a gap through 52.00 and has reached a high of 54.31 in WTI so far. The 13 non OPEC members agreed to cut crude output by 558,000bpd, of which Russia have pledge to cut by 300,000bpd. This move will be in addition to the 1.2 million barrels a day in cuts from OPEC members, and this is amounting to a total of almost 2 of global oil supply. This accord between OPEC and non-OPEc producing nations is a pact designed to reduce a global oversupply of crude and subsequently lift the value and prices of oil in a bid to support the economies that have been hit hard by the glut of oil that started over two years ago. Across the board, the dollar is mixed, but losing its shine rapidly, especially vrs the oil related bloc such as the pound and the Canadian dollar. We are now at the highest levels in WTI since the summer of 2017 when prices dropped below 56 and plummeted through 51.50 eventually on the oil glut that finally took the price all the way down to 28.93 in February earlier this year. 01:19 NZD/USD: offered below 200 sma on 1hr sticks NZD/USD has continued on the offer in early Asia to start the week ahead of the FOMC as the main event for markets. NZD/USD trades below the 1hr 200-sma at 0.7127 and is testing the downside of the ascending support line from the start of December39s rally at 0.7041. Just today, the front runner, Bill English, was confirmed as Prime Minister after John Key announced his resignation last week. Also, we had net migration for October that came in at 6240, from 6340 in October with wholesale sales 1 for Q3 vrs 1.7 prior seasonally adjusted. Analysts at Westpac explained the US dollar39s extended rise recently has flipped NZD/USD momentum from positive to neutral, in a 0.7000-0.7200 range. NZD/USD 1-3 month: quotThe US dollar has had an impressive rise since the US election and has potential to rise further during the months ahead, not least because the Fed will probably hike in December. Against that, the NZ economy is strong and dairy prices have risen. Overall we are left with a bearish outlook for NZD/USD, targeting sub-0.70,quot - analysts at Westpac offered. 00:41 GBP/USD: finding a bid in the open on a mixed dollar and despite Brexit w/e news GBP/USD has opened on the bid in early Asia while the dollar is mixed across the board - strong vrs the yen, euro and Aussie. Market wrap: US dollar and US rates helped by data - Westpac The pound has opened with a bid from lows of 1.2569 with a high up to test 1.26 the figure. The weekend news hasn39t offered anything significant that can be related to the gaps across the board and mixed outlook, but the pound is robust, despite PM May39s next challenge in respect of Brexit while opponents are launching a fresh legal action to upend her plans for leaving the EU and triggering Article 50 by the end of March 2017. The campaigners will be appealing to the high court in an effort to keep Britain in the single market and give MP39s powers to veto over the terms of which Britain can leave the EU. Other news came with Fitch affirming the UK AA with a negative outlook. Also, 13 non OPEC members agreed to cut output by 558,000bpd, of which Russia have pledge to cut by 300,000bpd - Non-OPEC counties join the cartel in output cut GBP/USD recently failed 1.2778 and close to the 100 day ma. To the downside, there is room to the 1.2424 two month uptrend on a break below 1.2530/50 local support area and a subsequent sell-off below the 1.25 handle. quotThis remains the break down point to the 1.2090/85 October 11 and 25 lows, quot suggested analysts at Commerzbank, adding, quotIntraday rallies are likely to now struggle circa 1.2665.Initial support lies at 1.2302/1.2285.quot 00:10 Prospects of another large economic stimulus package - Nomura Analysts at Nomura explained that the economic stimulus package approved by the Cabinet in August totaled yen28trn, more than had been expected. quotThe reasons for the size of the package were probably the strength of the yen in the first half of 2016 and serious concerns about the impact of Brexit on financial markets and the economy. We expect the economy to begin to slow gradually in FY17 H2 as the impact of existing economic stimulus packages begins to fade. However, with the economy unlikely to slow to below its potential growth rate, we do not expect a large economic stimulus package in FY17.quot quotThat said, in view of the many imponderables, we cannot rule out the possibility that concerns similar to those of this summer may reappear. In our view, such concerns are more likely to be triggered by developments overseas than in Japan. If President-elect Trump39s trade policies turn out to be protectionist, we see a risk that the new administration could favor a weaker dollar and try to pressurize countries with a trade surplus into stimulating domestic demand. Also, we will need to monitor US behavior at G7 and G20 meetings as well as look out for the US Treasury39s Semiannual Report on International Economic and Exchange Rate Policies. Similarly, election victories for protectionist political parties in Europe could trigger the risk-off trade (ie, flows into yen and out of stock markets), which could have a negative knock-on effect on the Japanese economy via its impact on financial markets. If such risks materialized, the likelihood of fiscal expansion would increase. quot Data source: FX Street Disclaimer :This material is provided by FXStreet as a general marketing communication for information purposes only and does not constitute an independent investment research. Nada nesta comunicação contém, ou deve ser considerado como contendo, um conselho de investimento ou uma recomendação de investimento ou uma solicitação com a finalidade de comprar ou vender qualquer instrumento financeiro. Todas as informações fornecidas são coletadas de fontes respeitáveis ​​e qualquer informação contendo uma indicação de desempenho passado não é uma garantia ou um indicador confiável de desempenho futuro. 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