Morning Update – 13/12/2016 – by Arjun Lakhanpal

Morning all.. Wall St closed mix with the Dow marginally higher but the S&P down 0.11% as investors take a break in front of the FOMC meeting tomorrow. Asia was also rather quiet with the Nikkei up 0.5% after stronger data from China. China November Industrial Production beat: 6.2% y/y vs 6.1% cons whilst Nov Retail Sales beat: 10.8% y/y vs 10.2% cons. FX markets were quiet with EUR in a 20 pip range (next resistance now at 1.0670) but USDJPY drifted to a low of 114.75 before rebounding as the Nikkei rose. US 10yr yield is 2.47% little changed… Oil is unchanged on the session.. The antipodean currencies followed the general USD direction, stronger early on then grinding lower – AUD and NZD found resistance above 0.7500 and 0.7200 respectively. Looking at the landscape, we think risk/ reward favours being short USDJPY after the breakdown from 116 and caution to EURUSD shorts as the pair failed to make new lows yet again. We also note that AUDNZD has managed to hold around the 1.04 zone despite the weak AUD GDP and hawkish RBNZ last week. The market expected to be quiet into the FOMC meeting tomorrow night; barring headlines. This morning we get CPI from Spain, Sweden and the UK with Italian Industrial Production.. Good luck..