On Thursday, the European markets started the day with the macroeconomic data coming from Germany. In Germany, the Euro area's largest economy, the Consumer Price Index fell 0.8 percent in November in line with expectations compared to the previous month. However, it rose 1.2 percent compared to the same month last year, according to data released by Destatis. On the other hand, according to data published by Eurostat, industrial production in the 19-member Euro area fell 0.5 percent in October compared to the previous month and 2.2 percent compared to the same month last year. The most important development on Thursday came from the European Central Bank. The ECB did not change interest rates at its first meeting under the presidency of Christine Lagarde. Leaving the interest rate at zero percent, deposit facility at - 0.5 percent and marginal lending facility at 0.25 per cent, the Bank stated it would continue its monthly bond-buying program worth 20 billion euro until it gets very close to the rate hike. In her remarks at the press conference, the ECB President Lagarde stressed that a long period of supportive stance is needed and that the ECB is ready to adjust all its instruments when necessary. Lagarde stressed that significant stimulus is needed to boost inflation, adding that governments need to increase their long-term growth potential and that governments with fiscal space should be ready to act in an effective and timely manner. Furthermore, Lagarde noted that the risks are still downward but less than the Bank's forecast of 1.1 percent growth in 2020 and that the Bank raised its Euro area growth forecast for 2019 from 1.1 percent to 1.2 percent.
The U.S. Senate Foreign Relations Committee approved a bill imposing sanctions on Turkey for its military operation in northeastern Syria and its purchase of the Russian S-400 air defense system. The Republican-led Senate Foreign Relations Committee voted by 18-4 to submitted the “Promoting American National Security and Preventing the Resurgence of ISIS Act of 2019” to Senate. On the trade talks, U.S. President Donald Trump said on his twitter account, "Getting VERY close to a BIG DEAL with China. They want it, and so do we!" In the U.S. macroeconomic calendar, the producer price index (PPI) stood at 1.1 percent, slightly below the annual expectations of 1.2 percent, yet it did not change against the monthly market expectations of 0.2 percent in November.
No official results have yet been announced for the UK election, but post-election exit polling shows the Conservative Party, led by Prime Minister Boris Johnson, is ahead by a clear margin. According to the poll, the Johnson-led Conservative Party won the election in first place with 368 seats, passing 326, an absolute majority, and regained power alone after 2 years. Following the poll results, Boris Johnson said, "At this stage it does look as though this one-nation Conservative government has been given a powerful new mandate, to get Brexit done and not just to get Brexit done but to unite this country and to take it forward." Labour, led by Jeremy Corbyn, finished second with 191 seats, losing 71 of the 262 seats it won in 2017. Corbyn, who suffered one of the worst defeats in his history, announced that he will resign. Also, the Scottish National Party won 55 seats, the Liberal Democrats and the Green Party won 13 and 1, respectively. In addition, the other regional parties won a total of 22 seats.
Asia & Turkey
Asian markets started the day with remarks from the Bank of Japan Deputy Governor. Deputy Governor Masayoshi Amamiya said the Bank would continue to focus on downside risks for the economy, particularly those caused by global developments, while leading the monetary policy. The BOJ needs to assess the pros and cons before taking any policy steps and the BOJ is aware that longstanding low interest rates could destabilize the financial system, Amamiya said. He further added the BOJ expected to see growth in the global economy rise modestly towards the middle of next year. In Turkey, the Monetary Policy Committee meeting of the CBRT was closely followed by the markets. At the last meeting of the year, the CBRT cut its policy interest rate by 200 basis points, from 14 percent to 12 percent. Following the decision of the Monetary Policy Committee, the press release on the official site of the CBRT stated that the inflation outlook continued to improve while inflation expectations displayed a wide-spread decline. It was further stated that thanks to the stable course of the Turkish lira as well as the developments in domestic demand conditions and producer prices, core inflation indicators have displayed a mild trend and the improvement in macroeconomic indicators, inflation in particular, supports the fall in country risk premium and contributes to a benign outlook in cost factors. The report further noted that the inflation is likely to materialize close to the lower bound of the October Inflation Report projections for the end of the year, with risks around the disinflation path for 2020 being balanced and that the Committee decided to reduce the policy rate by 200 basis points.
10Y Bond Yields
Yields of the government bonds are determined by trading in a second market. High yields mean that the government will pay off high interest rates. On the other hand, low yields mean that the government will pay off lower interest rates.
USDX continues to be priced within the downward channel and decreased below psychological price of 97.00. In terms of the new direction of the index, we take 97.00 level as reference and if this level is not exceeded, 96.65 and 96.50 support levels will be on our radar. 97.20 and 97.35 resistance will also be on our radar, if the parity tries to recover and exceeds 97.00 level.
The parity broke the symmetrical triangle in upward direction with the help of the trading movements in favor of euro and it is heading for completing the pattern. We follow 1.1100 in terms of the completion of the symmetrical triangle pattern and we expect the parity to show permanent closings above 1.1100, which is the 200-period simple moving average. If it can break 1.1190 resistance above by staying in this area, 1.1210 and 1.1230 resistance levels will be the new targets. In possible downward movements, the 200-period simple moving average is in a position to limit these movements.
The parity had retreated for TRY and recovered with the help of the responses it took at the lower barrier of the channel. However, it encountered with the critical resistance at 5.7900. We take 5.7900 level as the reference level for the short-term direction of the parity in the channel. If this level is exceeded on the new trading day, 5.8200 and 5.8400 resistance level will be on our radar. In closings below 5.7900 level, we will closely follow 5.7500 and 5.7300 support levels.
Entering the last trading day of the week with a price gap, the parity jumped above the ascending channel pattern. If we observe permanent closings above the upper barrier of channel, which we follow in terms of the completion of ascending channel pattern, the parity will test 1.3480 and 1.3500 resistance levels. In possible profit realizations, 1.3430 and 1.3400 support levels might be followed.
The parity settled below the 50-period exponential moving average for a short-period of time yet it bounced with the strong responses it took at the lower barrier of the channel. If we observe permanent closings above 109.00, which is significant for the parity to preserve its gains, the desire to rise might reach 110.00 and 110.30 resistance levels located above 109.80. In possible profit realizations, if 109.00, located below the psychological price of 109.30 support level, can be broken, the 50-period exponential moving average indicating 108.80 will be on our radar.
The commodity headed towards the upper barrier of the minor channel, yet it retreated due to the profit realizations and suppressed at the 50-period weighted average of 1470. If 1475 resistance level might be tested, the movements may lead towards 1480 and 1484 resistance levels respectively. In decreases below 1470, the lower barrier of the minor channel might be followed as the area for responses.
It appears that the commodity heading towards the upper barrier of the rising channel is balanced at the 50-period exponential moving average. As long as the parity stays above 50-period exponential moving average indicating 58.50 level, we expect it to keep its desire to move towards the upper barrier of the channel. On the other side, if it exceeds 59.80 resistance level on the new trading day, it may follow 60.40 and 60.80 resistance levels and the channel pattern might be completed. In possible decreases, 50-period exponential moving average might be considered as the area for responses.
It is seen that the commodity continues its pricing in the wedge pattern and tested the upper barrier of the wedge with the responses it takes at the 200-period exponential moving average, 16.60. On the last trading day of the week, if the recovery desire exceeds the psychological price of 17.00 resistance level, 17.12 and then, 17.25 resistance levels can be targeted and wedge pattern can be completed. If the desire for recovery is lack of volume in the commodity, we might observe downward movements, which will be limited at 200-period exponential moving average.
DAX took responses at Fibonacci fan line of 61.8 and the desire to rise formed again. If the rises continue on the new trading day and the critical resistance of 13 330 can be exceeded, the movements may reach 13 400 and 13 480 resistance levels. If the desire weakens, Fibonacci fan line of 61.8 located below 13 170 might be the new location for the new responses.
SP500 is testing its all-time peak and retains its bullish potential. We follow 3.140 level in terms of positive pricing possibility of the index. As long as the closings above this level, which is the 50-period exponential moving average, are permanent, the index may follow 3 185, 3 200 and 3 220 resistance levels respectively. In possible profit realizations in the index, we may observe the responses at 50-period exponential moving average.
Bitcoin couldn't end its search for direction and got under pressure at 7 200 resistance level, which is significant for Bitcoin. On the new trading day, BTC can head towards the closings above 7 200 level and test 7 700 resistance level. In this case, the potential to rise can target 8 300 and 8 700 resistance levels. On the other side, in decreases below 7 200, we will closely follow 6 800 and 6 400 support levels.
|00:00||European Council Meeting|
|00:01||RICS Housing Price Balance (Nov)|
|13:30||Import Price Index (MoM) (Nov)|
|13:30||Retail Sales (MoM) (Nov)|
|15:00||Business Inventories (MoM)|
|15:00||Retail Inventories Ex Auto|
|16:00||FOMC Member Williams Speaks|
|17:00||ECB's De Guindos speech|
|18:00||Baker Hughes Oil Drilling Count|
|18:00||U.S. Baker Hughes Total Rig Count|
|20:30||CFTC Gold NC net positions|
|20:30||CFTC GBP NC net positions|
|20:30||CFTC Oil NC net positions|
|20:30||CFTC USD NC net positions|