Tin tức thì trường

Major US stocks rose moderately after US Treasury Secretary Steven Mnuchin said Washington and Beijing would sign the first phase of the deal in early January. At the same time, investors ignored the impeachment report of the American president.

Market participants also analyzed a block of ambiguous macro statistics. Thus, the report of the Ministry of Labor showed that the number of initial applications for unemployment benefits in the United States fell from more than two-year highs. According to the report, the number of initial claims for unemployment benefits fell by 18,000 to 234,000, seasonally adjusted for the week ending December 14th. Economists predicted that the number of claims will fall to 225,000.

At the same time, a report published by the Federal Reserve Bank of Philadelphia showed that Philadelphia's manufacturing activity barely changed in December. According to the report, the index of current total activity fell to 0.3 in December from 10.4 in November ("zero" serves as a demarcation point between reduction and expansion). Economists had expected the index to fall to 8.0. With a much larger decrease than expected, the index fell to a minimum of six months.

A report submitted by the National Association of Realtors (NAR) showed a much larger-than-expected rollback in sales of existing homes in the US in November. The NAR reported that home sales in the secondary market fell 1.7% to 5.35 million year on year after rising 1.5% to 5.44 million in October. Economists had expected sales in the secondary housing market to fall to 5.44 million from the 5.46 million originally reported in the previous month.

Most DOW components recorded an increase (23 out of 30). The biggest gainers were Cisco Systems, Inc. (CSCO; + 2.66%). Outsider turned out to be shares of Caterpillar Inc. (CAT; -1.43%).

All S&P sectors completed trading in positive territory. The conglomerate sector grew the most (+ 0.9%).

At the time of closing:

Dow 28,376.96 +137.68 + 0.49%

S&P 500 3,205.37 +14.23 + 0.45%

Nasdaq 100 8,887.22 +59.48 + 0.67%

Morten Lund, an analyst at Nordea Markets, notes that at today’s meeting, Bank of England (BoE) unsurprisingly kept all its monetary policy instruments unchanged and was in line with both our view and consensus.

“Just like in November, two out of nine members dissented, with Jonathan Haskel and Michael Saunders favouring a 25 bp cut.

The overall message was slightly dovish. Thus, despite the Conservatives winning a solid absolute majority at the general election, the outlook of the economy remains weak and the uncertainty about the phase two negotiations concerning the future relationship with the EU persists. The BoE also see the risk skewed to the downside in relation to its economic projections.

Compared to the November inflation report, the BoE now expects growth in Q4 to be 0.1% q/q instead of 0.2%. This is above what is implied by the PMIs (point to -0.2% in Q4), but the PMIs have had a clear tendency to underestimate growth in 2019 in times of political uncertainty (notice latest flash PMIs were collected in the run-up to the general election). Our forecast is therefore also in line with the BoE, although the risk is clearly skewed to the downside.

Further out, GDP is expected to be 1.6% y/y in Q4 2020. We find that to be too optimistic. Thus, we do not expect an investment boom in Q1 2020 (as Boris Johnson has otherwise “promised”) on the back a likely ratified divorce deal as decision makers will soon be reminded of the lack of clarity about the difficult phase two trade negotiations. Therefore, we only expect to see a modest rebound in business investments after 31 January.”

• The trade pact is on paper and translated and not open to renegotiation
• China will double purchases of agricultural goods from the U.S. under phase 1 trade pact
• Pact is going through technical legal scrub; will release document and sign at the beginning of January
• U.S. priority on trade with China right now is to implement phase 1 deal but prepared to work hard on phase 2
• U.S. farmers can meet China demand
• USMCA trade pact should add 0.5% to U.S. GDP
• For the first time we have binding enforcement; if disputes are not resolved the president has the authorization to put on tariffs
• A lot of currency provisions from USMCA trade pact have been put into China phase I trade deal
• Negative interest rates in Europe have led banks to hold dollars
• Strength of U.S. dollar is sign of strength of economy

The National Association of Realtors (NAR) announced on Thursday that the U.S. existing home sales dropped 1.7 percent m-o-m to a seasonally adjusted rate of 5.35 million in November from a revised 5.44 million in October (originally 5.46 million).

Economists had forecast home resales decreasing to a 5.44 million-unit pace last month.

In y-o-y terms, existing-home sales rose 2.7 percent in November.

According to the report, single-family home sales stood at a seasonally adjusted annual rate of 4.79 million in November, down from 4.85 million in October, but up 3.5 percent from a year ago. The median existing single-family home price was $274,000 in November 2019, up 5.4 percent from November 2018. Meanwhile, existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 560,000 units in November, down 5.1 percent from October and 3.4 percent lower than a year ago. The median existing condo price was $248,200 in November, which is an increase of 4.5 percent from a year ago.

The NAR's chief economist Lawrence Yun noted that the decline in sales for November is not a cause for worry. "Sales will be choppy when inventory levels are low, but the economy is otherwise performing very well with more than 2 million job gains in the past year," said Yun.

The Conference Board announced on Thursday its Leading Economic Index (LEI) for the U.S. was unchanged in November, remaining at 111.6 (2016 = 100), following a revised 0.2 percent decrease in October (originally a 0.1 percent m-o-m drop).

Economists had forecast an advance of 0.1 percent.

Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board, said "The US LEI was unchanged in November after three consecutive monthly declines. Strength in residential construction, financial markets, and consumers' outlook offset weakness in manufacturing and labor markets. While the six-month growth rate of the LEI remains slightly negative, the Index suggests that economic growth is likely to stabilize around 2 percent in 2020."

The report also revealed the Conference Board Coincident Economic Index (CEI) for the U.S. rose 0.4 percent in November to 106.8, following a 0.1 percent drop in October. Meanwhile, its Lagging Economic Index (LAG) for the U.S. increased 0.5 percent in November to 108.7, following a 0.2 percent gain in October.

Statistics Canada reported on Thursday the wholesale sales fell 1.1 percent m-o-m to CAD64.17 million in October, following a revised 0.8 percent m-o-m increase in September (originally a 1.0 percent m-o-m gain).

Economists had forecast a drop of 0.1 percent m-o-m for October.

According to the report, lower sales were recorded in four of seven subsectors, accounting for 66 percent of total wholesale sales. The machinery, equipment and supplies (-3.0 percent m-o-m) and the miscellaneous (-3.4 percent m-o-m) subsectors contributed the most to the drop in October, while sales increased in the farm product (+3.1 percent m-o-m) and in the personal and household goods (+0.2 percent m-o-m) subsectors.

At the same time, wholesale inventories decreased 0.5 percent m-o-m in October. Inventories were down in four of seven subsectors, representing 76 percent of total wholesale inventories.

Analysts at Rabobank note the Bank of England's (BoE) MPC kept rates unchanged at 0.75% and there was again a dovish vote split as Michael Saunders and Jonathan Haskel voted for a 25 bps cut.

• "Yet the majority of the MPC found it too early to judge "how material" the outcome of the election would be for their outlook.
• We don't think that the economic uncertainty around a disruptive change to the UK's trading relationships is unlikely to vanish anytime soon.
• As Brexit will continue to cast its shadow on the UK economic outlook, we expect two rate cuts in 2020."

U.S. stock-index futures edged down on Thursday as investors digested mixed economic data along with the announcement of U.S. President Donald Trump's impeachment.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

Netflix (NFLX) target raised to $425 from $400 at Pivotal Research Group

Cisco (CSCO) upgraded to Overweight from Equal Weight at Barclays; target $53

Johnson & Johnson (JNJ) upgraded to Overweight from Equal Weight at Barclays; target $173

The Department of Commerce reported on Thursday that current account (C/A) gap in the U.S. narrowed to $124.1 billion in the third quarter of 2019 from a downwardly revised $125.2 billion gap in the previous quarter (originally -$128.2 billion). The deficit was 2.3 percent of current-dollar GDP in the third quarter, down less than 0.1 percent from the second quarter.

Economists had forecast a deficit of $ 122.1 billion.

According to the report, the $1.1 billion, or 0.9 percent, decrease in the C/A deficit mostly reflected a reduced deficit on goods and an expanded surplus on primary income.

Goods exports fell by $0.9 billion, to $413.8 billion, and imports of goods decreased by $4.5 billion, to $633.4 billion. The declines in both exports and imports primarily reflected decreases in industrial supplies and materials, mainly petroleum and products.

Receipts of primary income decreased by $4.1 billion, to $282.0 billion, and payments of primary income fell by $6.2 billion, to $213.3 billion. The decreases in both receipts and payments mainly reflected declines in direct investment income and in other investment income.

The data from the Labor Department revealed on Thursday the number of applications for unemployment benefits fell less than expected last week, pointing to sustained labor market strength.

According to the report, the initial claims for unemployment benefits decreased by 18,000 to a seasonally adjusted 234,000 for the week ended December 14, the lowest level since mid-April.

Economists had expected 225,000 new claims last week.

Claims for the prior week were remained unchanged at 252,000, the highest reading since September 2017.

Meanwhile, the four-week moving average of claims increased by 1,500 to 225,500 last week.

Micron (MU) reported Q1 FY 2020 earnings of $0.48 per share (versus $2.97 in Q1 FY 2019), beating analysts' consensus estimate of $0.47.

The company's quarterly revenues amounted to $5.144 bln (-35.0% y/y), beating analysts' consensus estimate of $4.781 bln.

The company also issued guidance for Q2 FY 2020, projecting EPS of $0.29-0.41 vs. analysts' consensus estimate of $0.41 and revenues of $4.50-4.80 bln vs. analysts' consensus estimate of $4.77 bln.

MU rose to $54.90 (+3.51%) in pre-market trading.

Analysts at TD Securities note that the Bank of Japan (BoJ) kept policy unchanged, as widely expected, and also left its forward guidance for policy rates and overall economic assessment unchanged.

• "Despite the "Phase 1" agreement between the US and China, BoJ highlighted significant" downside risks from overseas. BoJ introduced an ETF lending facility, first announced in April, to improve ETF liquidity. BoJ Governor sounded cautious in his press conference later, highlighting significant downside risks and a policy stance maintained towards easing."

• We will rule out any extension to the Brexit transition period
• Scottish independence next year would be a damaging distraction
• Says millions of people, many who have never voted Conservative before, have put their faith in this government

• China will keep economic operations within reasonable range
  
  

Analysts at TD Securities are expecting a 0.4% decline in wholesale sales of the Canadian economy for October in a partial unwind of last month's 1.0% gain, which was driven in part by an outsized increase in machinery & equipment sales.

• "ADP employment for November will be published alongside wholesale trade, where markets will look for confirmation of the sizeable pullback reported in the Labour Force Survey. The LFS revealed 52k jobs lost during the month, excluding a 19k decline in self-employment which is not captured by ADP."

The Bank of England (BoE) announced its Monetary Policy Committee (MPC) voted by a majority of 7-2 to maintain Bank Rate at 0.75 percent at its December meeting.

The MPC also voted unanimously to maintain the corporate bond purchases at £10 billion and UK government bond purchases at £435 billion.

In its statement, the BoE notes:

• Its projections for activity and inflation were set out in the November Monetary Policy Report and were based on the assumption of an orderly transition to a deep free trade agreement between the UK and the UE
• UK GDP growth was projected to pick up from current below-potential rates, supported by the reduction of Brexit-related uncertainties, an easing of fiscal policy and a modest recovery in global growth
• CPI inflation was projected to rise to slightly above the 2% target towards the end of the forecast period
• UK GDP increased by 0.3% in 2019 Q3 and is expected to rise only marginally in Q4
• Since the November Report, the GBP exchange rate has appreciated by 2% and UK-focused equities have outperformed their international counterparts
• There is no evidence yet about the extent to which policy uncertainties among companies and households have declined
• There continue to be some signs that the labour market is loosening, although it remains tight
• CPI inflation remained at 1.5% in November and core CPI inflation remained at 1.7%, broadly as expected. The headline rate is still expected to fall to around 1¼% by the spring, owing to the temporary effects of falls in regulated energy and water prices
• Monetary policy could respond in either direction to changes in the economic outlook in order to ensure a sustainable return of inflation to the 2% target
• The Committee will, among other factors, continue to monitor closely the responses of companies and households to Brexit developments as well as the prospects for a recovery in global growth
• If global growth fails to stabilize or if Brexit uncertainties remain entrenched, monetary policy may need to reinforce the expected recovery in UK GDP growth and inflation
• Further ahead, provided these risks do not materialize and the economy recovers broadly in line with the MPC's latest projections, some modest tightening of policy, at a gradual pace and to a limited extent, may be needed to maintain inflation sustainably at the target.
  
  

Analysts at TD Securities note the key data in the U.S. will be jobless claims and the Philadelphia Fed survey.

• "On claims, last week's 252K reading was well above the recent sub-220K trend and, on the surface, another relatively high reading, as we are forecasting, could suggest that the labor market is starting to weaken significantly. However, our 240K forecast reflects our second-guessing of the seasonal adjustment process, which is especially challenging at this time of year. We caution against extrapolating unless the rise is sustained in coming weeks.
• The Philadelphia Fed survey will mostly, but not entirely, reflect pre-China-trade-deal responses."

Francesco Pesole, an FX Strategist at ING, notes the averted risk of another slump in employment lifted the AUD overnight. However, a look beyond the headline figure flags a less flourishing picture, so the risks of the Reserve Bank of Australia (RBA) easing and AUD weakness remains vivid.

• "The usual employment dilemma that AUD investors face each month yielded a positive result this time around: employment rose 39.9k in November, up from -24.8k in October and beating the consensus 15.0k increase. The unemployment rate inched lower to 5.2% (from 5.3%) while the participation rate was flat at 66.0%. After the release, AUD rose across the board.
• Looking beyond the encouraging headline numbers, though, the labour picture appears less flourishing: the rise in employment was almost entirely due to part-time hiring (35.7k) while full-time employment only rose by 4.2k. This likely suggests that, while the labour outlook has not deteriorated further, it remains mixed and likely unable to justify any hawkish tilt in the central bank stance.
• Today's data failed to further endorse markets easing expectations, but equally failed to rule out an early-2020 cut. The OIS curve is still showing a 60% implied probability of the RBA cutting rates in one of the first three meetings next year (4th February, 3rd March, 7th April).
• Indeed, with markets torn around easing prospects, the slew of data in the next five weeks (before the February meeting) will tell us a lot about what direction the RBA will take, especially considering that the external environment seems to have stabilised after the phase-one US-China deal. The table below highlights the key data to monitor.
• After benefitting from the supported trade-related risk sentiment, any additional bullish run in AUD is inevitably bound to be challenged by the risk of more RBA easing. In line with what's highlighted above, expect AUD moves in January to be mostly "data-dependent" given that the US-China trade story seems to have hit the pause button for now.
• We suspect that some material improvement in the data (employment and inflation) will be needed to convince the markets that no more RBA easing is on the cards, so the balance of risk for the AUD appears to be tilted to the downside in Q1."

Analysts at Standard Chartered think China's 2019 budget is unlikely to be fully implemented as the broadly defined budget, including the general public and government funds budgets, envisages a consolidated deficit of 6.5% of GDP, based on their calculation.

• "The budget deficit is 1.8ppt higher (as a percentage of GDP) than the actual 2018 deficit, representing a significant fiscal stimulus if the budget is fully implemented. The fiscal data up to November suggests the general public budget is on track. The government funds budget, financed mainly by local land revenue and special bond issuance, will likely miss the target.
• Under the general public budget, December spending may not exceed spending in December 2018. In 11M-2019, revenue under this category grew 3.8% y/y (slower than budgeted) and expenditure increased 7.7% y/y (faster than budgeted). As a result, the YTD deficit is at CNY 2.75tn, CNY 808bn higher than the same period last year. If the 2019 budget is fully implemented, the December deficit will be CNY 1.5tn, compared to an actual deficit of CNY 1.8tn last December.
• The government funds budget has substantial room for expansion; however, time is running out. In the first 11 months of 2019, revenue grew 9.5% y/y (faster than budgeted) and expenditure rose 19% y/y (slower than budgeted). As a result, the YTD deficit is at CNY 790bn, CNY 622bn higher than the same period last year. This implies that the December deficit could be CNY1.4tn (which is practically unlikely), compared with a deficit of CNY 348bn last December."

A key economic adviser to Prime Minister Shinzo Abe criticised the Bank of Japan for its negative interest rate policy and called for bolder fiscal measures to underpin a fragile economy.

Koichi Hamada, professor emeritus of economics at Yale University, said the BOJ must ensure interest rates do not fall to a "reversal rate," or a level that could do more harm than good by crippling financial institutions' ability to lend.

"Negative interest rates hurt, particularly smaller financial institutions' health, so the BOJ must try to avoid a situation where interest rates reach a level deemed as a reversal rate," Hamada said.

"There are limits to how much the BOJ can fine-tune the yield curve. In such cases, it's necessary for fiscal policy to coordinate with monetary policy in such a way as to push up real and nominal interest rates," he told.

Hamada is among the architects of stimulus programme deployed by Abe nearly seven years ago. Dubbed "Abenomics", the strategy is based on bold monetary easing, flexible fiscal policy and structural reform. His remarks come as Abenomics reaches a turning point, with the boost to growth from the monetary and fiscal policy components tapering off.

Axel Rudolph, analyst at Commerzbank, suggests that USD/JPY continues to trade in a tight range just below the 109.71/79 resistance zone, made up of the current December highs and also the November 2018 to 2019 downtrend line, as well as the 200 week, moving average.

"Only if the 109.71/79 area were to successfully be bettered on a daily chart closing basis, would the 2015-2019 downtrend line at 110.39 be back in the picture. We expect it to cap, if reached, however. Support can still be seen between the 200- and 55-day moving averages as well as the current December low at 108.76/43. Only unexpected failure at 107.89 would probably trigger losses to the 106.48 October low. Failure at 106.48 would target the 106.00 mark. On a weekly chart close above the 2015-2019 downtrend line at 109.74."

UBS Wealth Management said it remained positive on the British pound and advises adding exposure to sterling as it weakens towards $1.30 to benefit from the possibility of a rally to $1.45 by end-2020.

"Fading dollar demand and a clear path toward a benign free trade agreement with the EU could see sterling rallying to $1.45 by end-2020," Chief Investment Officer Mark Haefele told.

Sterling touched highs above $1.35 after the ruling Conservatives won a clear majority in Dec. 12 elections, but has since fallen back to around $1.31 on fears that Britain could still crash out of the European Union without a trade deal at the end of a transition period in Dec. 2020. Prime Minister Boris Johnson's government has ruled out an extension to the deadline.

According to the report from Office for National Statistics, in the three months to November 2019, the quantity bought in retail sales decreased by 0.4% when compared with the previous three months; this is the first decline since April 2018.

The quantity bought in November 2019 fell by 0.6% when compared with the previous month, with only household goods stores reporting growth. Economists had expected a 0.3% increase.

Year-on-year growth in the quantity bought increased by 1.0% in November 2019; this is the lowest growth since April 2018, owing to a decline of 1.1% in non-food stores. Economists had expected a 2.1% increase.

In 2019, the official Black Friday was on 29 November and outside our November reporting period, which covers four weeks from 27 October to 23 November; our seasonally adjusted estimates account for this shift in timing. Online sales as a proportion of all retailing was 18.7% in November 2019, compared with the 19.1% reported in October 2019.

British employers offered their staff an average annual pay settlement of 2.8% in the three months to November, up slightly from 2.7% in the three months to October, industry data showed.

The figures from human resources consultancy XpertHR show a pick-up in pay from the average in 2019, though the firm warned against drawing firm conclusions due to the small number of firms striking deals at this time of year.

"Our annual measure of pay settlements continues to show a median 2.5% pay award during 2019. We expect employers to stay close to this figure as we head into 2020," XpertHR analyst Sheila Attwood said.

Official weekly earnings data showed annual pay growth slowed to a six-month low of 3.5% in the three months to October.

According to analysts at TD Securities, today's a busy day for the UK , with a rate decision from the BoE, the new government's Queen's Speech, and for data we have November retail sales.

"For sales, with the Black Friday weekend having occurred so late in the month, those sales may not have been caught by the retail sales report. So we're below consensus in looking for a -0.5% m/m decline (mkt +0.2%). We look for sales losses to come from clothing/footwear and household goods. For the Bank of England decision, we look for the BoE to keep its policy stance unchanged with another 7-2 vote. The macro data has deteriorated further, but there's a firm hope that as political uncertainty lifts, UK growth will pick up. The recent US-China deal also reduces the downside tail. However, we still see about a 1/3 chance that Vlieghe joins Haldane and Haskel in voting for a rate cut, making it a narrower 6-3 decision."

China's economy will likely grow at 6.1% this year, and it won't drop below 6% in 2020, according to a former central bank adviser.

"Whether China will maintain 6% growth is not a valid question anymore," Sheng Songcheng, a former director of the People's Bank of China's statistics and analysis department, wrote. "The Chinese economy has bottomed out."

Consumption, investment and trade are expected to recover, and the economy has shown signs of marginal improvement, according to Sheng. "The current reform measures and technological advancement should create huge growth potential for the Chinese economy," he said.

Sheng's comments are surprisingly upbeat, even taking into account the pick up in economic data in November. Other economists remain skeptical of the sustainability of the rebound, arguing that the data may have been boosted by delayed production or policy distortions, rather than real demand.

Danske Research discusses its EUR/USD outlook and adopts a constructive bias over the coming year.

"Risks are broadly skewed on the downside for USD, as risk sentiment stays supported by a lenient Fed amid a brightening cyclical outlook globally. Further, EUR/USD may get some support from eurozone outperformance versus the US according to our equity strategists. This is likely to make it difficult for EUR/USD to edge firmly below 1.10 for now and puts 1.12 within reach going into the new year. However, we stress that this is not the beginning of a steady correction higher: while the cross remains undervalued, we still believe the lack of rate support for EUR caps upside in the pair, i.e. the ECB is essentially a constant for FX markets for now. We look for EUR/USD to trade close to 1.11 on 1-3M and look for a rise to 1.13 on 6M on resumed Fed easing and further to 1.15 in 12M as a moderate global recovery is sustained and as the Fed supports US inflation outperformance versus the eurozone," Danske adds.

China and the United States are in close communication over the signing of their Phase 1 trade deal, China's commerce ministry said, which will see lower U.S. tariffs on Chinese goods and higher purchases of U.S. farm, energy and manufactured goods.

U.S. officials say China agreed to increase purchases of U.S. products and services by at least $200 billion over the next two years. China has made no mention of hard targets but has said it will import more U.S. wheat, rice, corn, energy, pharmaceuticals and financial services.

Both the Chinese and U.S. trade teams are in close contact, Gao Feng, spokesman at the Chinese commerce ministry, told reporters at a regular briefing, adding that there is no specific information concerning the deal to disclose currently.

Australia must abandon criticism of China and see the development of its largest trading partner as an opportunity if bilateral relations are to improve, Beijing's ambassador to Canberra said.

Relations between Australia and its most important trading partner have deteriorated in recent years amid accusations that China is meddling in Australia's domestic affairs. Canberra also fears China is seeking undue influence in the Pacific region.

Souring relations have strained bilateral trade, prompting some business executives to urge Australia's conservative government to prioritise economic policy above national security and human rights.

In rare public comments, Cheng Jingye, China's ambassador to Australia, described 2019 as a "mixed year" for the relationship.

"I think it is important ... to look at each other's development as an opportunity, rather than a threat," Cheng told reporters in Sydney.

Australia has for months sought to ease bilateral tensions by refraining from public criticism of China.

But in recent weeks, several senior government officials have said Canberra would not be silenced about concerns such as China's militarisation of the South China Sea, its treatment of ethnic minorities and its detention of Australian citizens.

According to Danske Bank analysts, the key event will be the meeting in the Swedish Riksbank, which is widely expected to result in a rate hike.

"The timing is unusual as most data suggests that GDP growth is slowing towards zero. In Norway on the other hand, we do not expect Norges Bank to touch interest rates (10:00 CET announcement). Bank of England will round off central bank meetings of the day. Despite the weaker economy and softer policy signal we do not expect the Bank of England to change anything, as it is an interim meeting. We expect a cut at the following meeting in January as data has deteriorated lately pointing to very weak growth. UK also releases retail sales for November, which we doubt will move markets. Also in the UK, the new MPs are sworn in today and the House of Commons is reopened with the Queen's speech, outlining the government's previously announced legislative programme alongside new measures."

• No risk for China economy to head to stagnation.

• Global economy outlook has become brighter than a few months ago.

• No change to view that Japan economy in moderate growth.

• Expect government stimulus package to have positive impact on prices.

• Will take into account govt stimulus package impact on economy at January rate review, quarterly forecast review.

• Can't deepen negative rates indefinitely as could affect financial institutions.

• Always need to weigh costs, benefits of negative rates and other policy options.

• Lowering super long bond yields could have negative impact on consumer sentiment.

• Must watch costs of prolonged low rates policy.

• Don't think financial intermediation is deteriorating now.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1227 (5140)

$1.1203 (2566)

$1.1191 (3735)

Price at time of writing this review: $1.1127

Support levels (open interest**, contracts):

$1.1092 (4536)

$1.1070 (1203)

$1.1047 (5511)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date January, 3 is 54574 contracts (according to data from December, 18) with the maximum number of contracts with strike price $1,1050 (5511);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3321 (914)

$1.3284 (1235)

$1.3252 (1728)

Price at time of writing this review: $1.3084

Support levels (open interest**, contracts):

$1.3050 (1259)

$1.3023 (536)

$1.2991 (696)

Comments:

- Overall open interest on the CALL options with the expiration date January, 3 is 19724 contracts, with the maximum number of contracts with strike price $1,3500 (3261);

- Overall open interest on the PUT options with the expiration date January, 3 is 26822 contracts, with the maximum number of contracts with strike price $1,2500 (2283);

- The ratio of PUT/CALL was 1.36 versus 1.40 from the previous trading day according to data from December, 18

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.