A Eurex publication focused on European financial markets, produced by MNl

Morning Briefing January 9th 2017 Monday is a busy day on both sides of the Atlantic, with a slew of data set for release. The European calendar gets underway at 0700GMT, with the publication of the German industrial production numbers and the latest trade balance. The Bank of France Business survey will be released at 0730GMT. The latest Swiss retail sales data will cross the wire at 0815GMT. The only UK data set for release is expected at 0830GMT, with the publication of the December Halifax House Price Index. UK politics will also return to the fore Monday, as Parliament returns from the Christmas recess. House prices rose 0.2% m/m in November, rising 6.0% y/y. Analysts expect a annual rise of 6.1% in December.

The Euro area Sentix Economic Index will be published at 0930GMT. The EMU November unemployment rate will be published at 1000GMT, with forecasts for a small improvement on October's 9.8% rate. The US calendar gets underway at 1400GMT, when Boston Federal Reserve Bank President Eric Rosengren gives keynote address at the Connecticut Business & Industry Association's Economic Summit in Hartford. Back on the Continent, the ECB will call for bids on this week's 7-day MRO, before releasing the outcome of the latest PSPP bond-buying data at 1450GMT. US data due at 1500GMT sees the Fed's LMCI released. The Bank of Canada Business Outlook Survey will be released at 1530GMT.

Global Economic Trading Calendar

At 1600GMT, the NY Fed survey of consumer expectations is due for publication. Atlanta Federal Reserve Bank President Dennis Lockhart speaks on monetary policy to the Rotary Club of Atlanta, with an audience and media Q&A expected. Late US data sees the November consumer credit data released at 2000GMT. Consumer credit usage is expected to rise by $19.3 billion in November after a $16.0 billion gain in October. Retail sales rose only 0.1% in the month and were up only 0.2% excluding motor vehicle sales. When gasoline sales were also excluded, retail sales posted a 0.2% increase, suggesting revolving credit use could be soft in a month that should represent the start of the holiday shopping season.

Markets FOREX: The dollar was generally better bid in holiday-thinned trading during the Asia-Pacific region. Dollaryen opened at Y116.90 and held a Y116.89 to Y117.44 range, last at Y117.40. Euro-dollar edged a bit lower from $1.0545 to $1.0522 and was last at $1.0531. Aussie-dollar was an outperformer against the greenback, rising from $0.7289 to $0.7328 on cross related flows. Aussie-dollar was last at $0.7315. Meanwhile, the pound had a tough start to the new week, after opening at $1.2260 down from a $1.2283 close in New York on Friday, the rate extended the drop to $1.2238 before recovering. The move followed comments made by UK PM May over the weekend, who said, the UK will leave the EU single market and that she is not interested in keeping "bits of EU membership", the comments sparking concerns of a 'hard Brexit'. Cable was last at $1.2245 US INDEX FUTURES: US stock index futures are trading higher after the Dow Jones, Nasdaq and S&P posted fresh record highs on Friday, but the absence of Tokyo investors due to the Coming-of-Age day holiday has seen a quiet Asian session so far. Currently the Mar'17 e-mini S&P futures are trading up 2.50 points at 2,274.00, the Mar'17 e-mini Nasdaq futures are trading up 8.00 points at 5012.00 while the Mar'17 e-mini Dow futures are trading up 18 points at 19,915.

Fresh signs of strength in the labour market helped send US stocks to alltime highs on Friday, with the Dow Jones climbing within one point of the magical 20,000 level before settling at 19.963.80, up 64.51pts (0.3%) - about 10pts below its record closing high but up 1% last week. The Dow Jones hit an intraday high of 19,999.63 and may have lost some momentum due to the shooting in Fort Lauderdale, Florida. The S&P 500 rose 7.98pts (0.35%) to a record closing high of 2,276.98, up 1.7% last week - its best weekly performance in a month while the Nasdaq Composite also achieved a new record closing high, climbing 33.12pts (0.6%) to 5,521.06, up 2.6% for the week and the Russell also advanced 0.6% on Friday, settling at 1,367.28. US TSY FUTURES: With cash treasuries closed in Asia due to Japan observing the Coming-of-Age day holiday, its been a very quiet session for treasury futures, with 10yr futures essentially flat from the Friday's close at 124-12 in modest volumes of 16k. BMO's Ian Lyngen and Aaron Kohli write "in the week ahead, the Treasury market faces a meaningful test of overseas sponsorship with the takedown of the 10- and 30-year Reopening auctions as well as a key gauge of the pace of fourth-quarter consumption via December's Retail Sales release".

They note "the market gave back much of last week's pre-NFP rally following the largely as-expected jobs print, although in doing so yields managed to remain below the FOMC-day range in both 10s and 30s". ". JAPAN: Japanese markets are closed for the Coming-of-Age Day holiday, GOLD: Spot gold last up $2.75 at $1,175.35 per ounce, in a $1,176.10 to $1,172.00 range so far this morning in Asia, with the market seeing a slight bid despite the US dollar posting slight gains against the yen, with futures seeing some 1.5k trade on the move from 1,173.40 to 1,176.30. However, trade has been quiet overall as Japanese markets are closed for the Coming-of-Age Day holiday. Friday saw Feb'17 gold close down $7.90 at 1173.40, as the US dollar strengthened in the wake of a solid payroll report. OIL: WTI crude oil futures for Feb'17 delivery last down $0.22 at $53.77 per barrel, after a $53.83 to $53.66 range in Asia today, as news that Saudi Arabia is planning to cut its output offset by a rise in the Baker Hughes rig count on Friday, while news that the Niger Delta Avengers are set to resume attacks on Nigeria's oil facilities has been offset but a surge in Iranian tanker exports, Bloomberg and Reuters news reports

Technical Analysis BUND: (H17) Pressuring Key Support

*RES 4: 165.26 Monthly High Nov 9 *RES 4: 164.82 100-DMA *RES 3: 164.92 100-DMA *RES 3: 164.33 Hourly support Jan 3 now resistance *RES 2: 164.33 Hourly support Dec 3 now resistance *RES 2: 163.76 Hourly resistance Jan 3 *RES 1: 163.76 Hourly resistance Dec 3 *RES 1: 163.29 Hourly support Jan 6 now resistance *PREVIOUS CLOSE: 163.45 *PREVIOUS CLOSE: 162.82 *SUP 1: 162.75 21-DMA *SUP 1: 162.62 High Dec 14 now support *SUP 2: 162.62 High Dec 14 now support *SUP 2: 162.04 Low Dec 19 *SUP 3: 162.04 Low Dec 19 *SUP 3: 160.80 Low Dec 12 *SUP 4: 160.80 Low Dec 12 *SUP 4: 159.91 Monthly Low Dec 8

EUROSTOXX: 3259.27-3290.52 Support Region Key

*COMMENTARY: The failure to close above 165.26 has *COMMENTARY: Despite having found support around the 21resulted in a sell-off that eases immediate bullish pressure and DMA (162.99) earlier last week, bears take comfort from a close sees immediate focus now on the 162.04-62 support region. below the 21-DMA Friday. The 162.62 support remains key with Bears now need a close below 162.04 to shift immediate focus bears needing a close below to further confirm a break of the 21back to 159.91 and overall focus to 158.67-159.14 where the DMA and below 162.04 to reconfirm a return in focus to the weekly bull channel base is located. Initial resistance is noted at 159.91-160.80 region. Layers of resistance remain with bills 163.76 but bulls look for a close above 164.33 to see the 100needing a close above 163.76 to ease immediate bearish pressure DMA pressured once more. and above 164.33 to shift focus back to 164.82-156.26 where the 100-DMA is located. *RES 4: 3394.83 High Dec 7 2015 *RES 3: 3345.20 High Dec 17 2015 *RES 2: 3334.44 2017 High Jan 3 2017 *RES 1: 3325.50 High Jan 4 *PREVIOUS CLOSE: 3321.17 *SUP 1: 3299.66 Low Jan 6 *SUP 2: 3290.52 High Dec 30 now support *SUP 3: 3259.27 Low Dec 22 *SUP 4: 3239.87 Low Dec 16 *COMMENTARY: Fresh 2 year highs continued for the index Tuesday but the lack of topside follow through remains a concern when combined with daily momentum divergence and a slow stochastic study overdue a correction from O/B levels. In saying that, bears still need a close below 3290.52 to ease immediate bullish pressure and below 3259.27 to hint at a deeper correction back to the 55-DMA (3128.58).

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