Market Brief


Is this the calm before a larger volatility expansion across global markets as key economic data approaches?

Could shifting rate expectations trigger a volatility expansion across European equities?

Read below what our desk thinks, and the important levels to watch this week.

This market brief is an overview of the week ahead and some of the events we see as being important to the markets.

Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up-to-the-minute market analysis see our live trading room.

INDICES

AUSTRALASIA

ASX – 8753 (-6 or -0.07%)

The ASX edged slightly lower this week with a marginal -0.07% decline, showing a flat to mildly bearish tone.

VOLATILITY ALERTS:
Wed 11:30 – CPI (Nov) AUD

Wed 11:30 – RBA Trimmed Mean CPI YoY (Nov) AUD

Thu 11:30 – Balance of Trade (Nov) AUD

For a move to the upside, we must now see this market close above 8774. Should this occur, we will look for a move into 8797, and if the upside momentum is strong, we could see a move higher into 8819 and potentially 8862.

If we cannot close above 8732, we could see a move back to test 8709 before a pause to the downside. A break below this level may result in a sharp move lower into 8687, and any further breaks to the downside may see a bigger move into 8644.

EUROPE

DAX (30) – 24584 (+265 or +1.09%)

The DAX surged higher this week with a strong +1.09% gain, showing clear bullish momentum and renewed upside strength.

VOLATILITY ALERTS:
Tue 18:45 – Inflation Rate YoY (Dec) EUR

Wed 19:55 – Unemployment Rate (Dec) EUR

Wed 21:00 – CPI (Dec) EUR

For a move to the upside, we must now see this market close above 24645. Should this occur, we will look for a move into 24707, and if the upside momentum is strong, we could see a move higher into 24768 and potentially 24892.

If we cannot close above 24522, we could see a move back to test 24461 before a pause to the downside. A break below this level may result in a sharp move lower into 24399, and any further breaks to the downside may see a bigger move into 24276..

US

S&P 500 – 6862 (-63 or -0.91%)

The SPX moved lower this week with a -0.91% decline, maintaining bearish pressure and short-term downside momentum.

VOLATILITY ALERTS:
Thu 00:15 – ADP Employment Change (Dec) USD

Fri 00:30 – Initial Jobless Claims (Jan/03) USD

Sat 00:30 – Non-Farm Payrolls (Dec) USD

For a move to the upside, we must now see this market close above 6879. Should this occur, we will look for a move into 6896, and if the upside momentum is strong, we could see a move higher into 6913 and potentially 6947.

If we cannot close above 6845, we could see a move back to test 6828 before a pause to the downside. A break below this level may result in a sharp move lower into 6811, and any further breaks to the downside may see a bigger move into 6777.

FOREX

AUD/USD –    0.6692 (-12 or -0.18%)

AUDUSD slipped lower this week with a -0.18% decline, showing mild bearish pressure and limited downside follow-through.

VOLATILITY ALERTS:
Wed 11:30 – CPI (Nov) AUD

Wed 11:30 – RBA Trimmed Mean CPI YoY (Nov) AUD

Thu 11:30 – Balance of Trade (Nov) AUD

Thu 00:15 – ADP Employment Change (Dec) USD

Fri 00:30 – Initial Jobless Claims (Jan/03) USD

Sat 00:30 – Non-Farm Payrolls (Dec) USD

For a move to the upside, we must now see this market close above 0.6708. Should this occur, we will look for a move into 0.6725, and if the upside momentum is strong, we could see a move higher into 0.6742 and potentially 0.6776.

If we cannot close above 0.6675, we could see a move back to test 0.6658 before a pause to the downside. A break below this level may result in a sharp move lower into 0.6642, and any further breaks to the downside may see a bigger move into 0.6608.

EUR/USD – 1.1709 (-60 or -0.51%)

EURUSD moved lower this week with a -0.51% loss, maintaining bearish momentum and sustained downside pressure.

VOLATILITY ALERTS:

Tue 18:45 – Inflation Rate YoY (Dec) EUR

Wed 19:55 – Unemployment Rate (Dec) EUR

Wed 21:00 – CPI (Dec) EUR

Thu 00:15 – ADP Employment Change (Dec) USD

Fri 00:30 – Initial Jobless Claims (Jan/03) USD

Sat 00:30 – Non-Farm Payrolls (Dec) USD

For a move to the upside, we must now see this market close above 1.1738. Should this occur, we will look for a move into 1.1767, and if the upside momentum is strong, we could see a move higher into 1.1796 and potentially 1.1855.

If we cannot close above 1.1679, we could see a move back to test 1.1650 before a pause to the downside. A break below this level may result in a sharp move lower into 1.1621, and any further breaks to the downside may see a bigger move into 1.1562.

GBP/USD – 1.3451 (-41 or -0.3%)

GBPUSD edged lower this week with a -0.30% decline, showing controlled bearish pressure and weak recovery attempts.

VOLATILITY ALERTS:

Tue 20:30 – DMP 1Y CPI Expectations (Dec) GBP

Sat 18:00 – Halifax House Price Index YoY (Dec) GBP

Sat 00:30 – Treasury Gilt Auction / Employment sensitivity (Labour-related impact) GBP

Thu 00:15 – ADP Employment Change (Dec) USD

Fri 00:30 – Initial Jobless Claims (Jan/03) USD

Sat 00:30 – Non-Farm Payrolls (Dec) USD

For a move to the upside, we must now see this market close above 1.3484. Should this occur, we will look for a move into 1.3517, and if the upside momentum is strong, we could see a move higher into 1.3550 and potentially 1.3619.

If we cannot close above 1.3418, we could see a move back to test 1.3384 before a pause to the downside. A break below this level may result in a sharp move lower into 1.3351, and any further breaks to the downside may see a bigger move into 1.3282.


USD/JPY – 156.79 (+28 or +0.18%)

USDJPY pushed higher this week with a modest +0.18% gain, maintaining bullish structure and gradual upside momentum.

VOLATILITY ALERTS:

Thu 16:00 – Consumer Confidence (Dec) JPY

Fri 10:30 – Household Spending YoY (Nov) JPY

Fri 10:30 – Household Spending MoM (Nov) JPY

Thu 00:15 – ADP Employment Change (Dec) USD

Fri 00:30 – Initial Jobless Claims (Jan/03) USD

Sat 00:30 – Non-Farm Payrolls (Dec) USD

For a move to the upside, we must now see this market close above 157.18. Should this occur, we will look for a move into 157.58, and if the upside momentum is strong, we could see a move higher into 157.97 and potentially 158.75.

If we cannot close above 156.40, we could see a move back to test 156.01 before a pause to the downside. A break below this level may result in a sharp move lower into 155.62, and any further breaks to the downside may see a bigger move into 154.83.

COMMODITIES

GOLD – 4367 (-167 or -3.68%)

Gold sold off sharply this week with a -3.68% drop, showing strong bearish momentum and heavy downside pressure.

For a move to the upside, we must now see this market close above 4378. Should this occur, we will look for a move into 4389, and if the upside momentum is strong, we could see a move higher into 4400 and potentially 4421.

If we cannot close above 4356, we could see a move back to test 4345 before a pause to the downside. A break below this level may result in a sharp move lower into 4334, and any further breaks to the downside may see a bigger move into 4312.

CRYPTOS

BITCOIN –  91392 (+3869 or +4.42%)

Bitcoin surged strongly this week with a +4.42% rally, confirming bullish momentum and aggressive upside continuation.

For a move to the upside, we must now see this market close above 91620. Should this occur, we will look for a move into 91849, and if the upside momentum is strong, we could see a move higher into 92078 and potentially 92535.

If we cannot close above 91163, we could see a move back to test 90935 before a pause to the downside. A break below this level may result in a sharp move lower into 90706, and any further breaks to the downside may see a bigger move into 90249.

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