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Asian equities have had a mixed trading session overnight, with the positive momentum from Wall Street failing to be sustained. US regional banks experienced a short squeeze, driving stocks higher. However, the upside was limited due to concerns over the debt ceiling and a disappointing NY Fed Manufacturing survey. Additionally, Asian market sentiment was impacted by weaker-than-expected Chinese activity data. The mainland Chinese market remained subdued after disappointing Industrial Production, Retail Sales, and Fixed Assets Urban Investment all fell short of analysts' forecasts. Furthermore, it was reported overnight that Michael Burry, known for his 'Big Short' fame, increased his bullish bets on e-commerce giants JD.com and Alibaba.

UK investors are digesting this morning's release of UK employment market data showing slightly weaker numbers than anticipated. Unexpectedly, the unemployment rate rose from 3.8% to 3.9%, and regular pay growth (excluding bonuses) increased by a smaller margin than expected, reaching 6.7% compared to the previous 6.6%. While there are indications of an improvement in labor supply, it's worth noting that the Bank of England acknowledged this development last week following its twelfth interest rate increase in a row.

European investors will focus on the German ZEW survey for May which will offer an initial assessment of economic sentiment, primarily based on the views of institutional investors rather than businesses. Markets expect a decline in the expectations component, this would mark the third consecutive decrease, reaching the lowest level since December 2022. The recent downtrend reflects financial market volatility, partly influenced by challenges faced by US regional banks. Additionally, the ZEW current situation index is also expected to decline.

Stateside, investors will focus on data deemed to support expectations of a pause in the Fed's interest rate policy. Today's focus lies on April's industrial production and retail sales figures. Markets expect a month-on-month increase in retail sales, marking the first rise in three months, however, this growth is likely driven by auto sales rather than broad-based strength. Industrial activity is expected to remain stagnant, aligning with recent softening in manufacturing surveys. US investors will also eye a bevy of central bank speakers on deck today, with Mester (2024), Bostic (2024), Logan (voter) and Williams (voter) all set to speak.
 

FX Options Expiries For 10 am New York Cut 

(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)

• EUR/USD: 1.0815-20 (555M), 1.0895-1.0900 (680M), 1.0920 (306M)
• 1.0950-65 (925M), 1.0995-1.1000 (900M)
• USD/CHF: 0.8850 (200M). EUR/GBP: 0.8740 (233M),
• AUD/USD: 0.6700-10 (1.5BLN), 0.6760 (515M), 0.6800 (566M)
• USD/CAD: 1.3305 (450M), 1.3640 (438M)
• USD/JPY: 135.75 (280M), 136.00 (384M)
   

CFTC Data As Of 12/05/2023

• USD net spec short position grew in May 3-9 period; $IDX -0.24$
• EUR$ -0.38% in period, specs +5,933 contracts now long 179,422
• Net EUR long position highest since Oct 2020, was +212k in Aug 2020
• $JPY -0.96% in period, specs +7,309 contracts yen short pared to -61,015
• GBP$ +1.2%, trade to new 2023 high; specs buy 3,463 contracts now long 4,528
• $CAD -1.77%, specs cut CAD short +7,833 contracts; AUD$ +1.52%, specs -4,183
• BTC -3.62% in period, specs buy dip add 255 contracts now long 423 (Source RTRS)
   

Overnight News of Note

• Tsy’s Yellen Holds Firm On Potential June 1 Debt Ceiling Deadline
• Biden, McCarthy Debt Ceiling Meeting Planned For Tuesday Afternoon
• GOP Rejected WH Effort To Close Tax Loopholes In Debt Ceiling Talks
• Fed Officials Expect US Interest Rates To Stay High, Possibly Rise
• China’s Economic Recovery Worries Mount As Data Disappoints
• China’s Inflation May Bottom Out In Q2 On The Back Of Policy Support
• RBA Says More Rate Increases May Be Required, Dependent On Economy
• Australian Consumer Mood Bleak In May After Surprise Rate Hike, Budget
• Foreign Buying Of US Treasuries In March Hits Largest Since June 2021
• Oil Edges Higher With US Seeking Crude For Strategic Reserves
• Asia Stocks Steady Despite China Data Miss, Helped By Weaker Dollar Outlook
• FTC Will Sue To Block Amgen’s Deal To Buy Horizon Therapeutics

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
 

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4100

• Below 4090 opens 4040
• Primary support is 4000
• Primary objective is 4207
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

EURUSD Bias: Intraday Bullish Above Bearish below 1.09

• Below 1.09 opens 1.08
• Primary support  is 1.07
• Primary objective is 1.1128
• 20 Day VWAP bearish, 5 Day VWAP bearish

(Click on image to enlarge)

GBPUSD Bias: Intraday Bullish Above Bearish below 1.25

• Below 1.2475 opens 1.24
• Primary support  is 1.2350
• Primary objective 1.2750
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

USDJPY Bias: Intraday Bullish above Bearish Below 134

• Below 133.90 opens 133
• Primary support  is 133
• Primary objective is 138.80
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

AUDUSD Bias: Intraday Bullish Above Bearish below .6720

• Below .6710 opens .6670
• Primary support  is .6640
• Primary objective is .6826
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

BTCUSD Intraday Bias: Bullish Above Bearish below 28300 - Target Hit - New Pattern

• Primary resistance 30000
• Primary objective is 26000
• Below 26000 opens 25800
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

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