• Asian Equities once again took a positive impetus from the rally on Wall Street Friday, with the benchmark SP500 notching up a 0.4% gain confirming back-to-back positive weekly gains to kick off the new year. Overnight, however,  Asian markets have turned a little more mixed, headlines out of China have confirmed 60,000 Covid-related deaths reported since the removal of restrictions, while hospitalizations remain elevated, Chinese authorities believe the peak has passed. Elsewhere in the Asian region, investors are keenly eyeing this week's Bank of Japan meeting, with rising expectations that the BoJ will finally pivot from its ultra-easy monetary policy. This belief in the markets has seen the Japanese Yen print seven-month highs against the greenback.
• Today’s economic data calendar has no tier-one catalysts for markets, this combined with US markets offline for Martin Luther King day, which suggests a potential for lackluster action this afternoon. Focus in the Uk will be on Bank of England Governor Bailey, who is due to appear before the Parliamentary Treasury Committee to testify on the bank's Financial Stability Report, with Committee members eager to quiz the Governor on the ongoing financial impact of the UK cost of living crisis, which has been further exacerbated by rising borrowing rates. 
• Investors will be eyeing other data events of note later this week, China releases its Q4 GDP data Tuesday, and market expectations are conservative with economists looking for a meager 1.8% from the 3.9% print for Q3 2022, given that Covid restriction remained in place for much of Q4, commercial activity was handicapped and industrial output was likely depressed. Tuesday will also see the release of the UK employment report, market watchers are looking for further signs that employment conditions are cooling from record tightness, the concern is that any reduction in wage inflation likely appears some way off, with most penciling in an elevated 6.1% for this metric. In the Eurozone, the only data of note this week is Wednesday’s German inflation data and the ZEW investor survey. Investors will parse the data for further signs of sentiment improvement. Downunder in Australia, the only data release of note will be Thursday's employment report, while headline data points have softened slightly they still remain elevated
• Stateside, in the US, Wednesday’s Producer Prices, Retail Sales, and Industrial production data are the key events, producer prices are deemed to remain elevated butting starting to pullback from peak levels, while retail sales are still thought to feel the pinch from elevated interest rates, while industrial production should remain hampered by weaker global and domestic demand.
• Markets-wise, the Dollar trade remains front and center, with the greenback inking new 2023 lows below 102 overnight testing 101.50, admittedly liquidity is reduced with the US trading desk offline today.  As London trading gets underway a decent Dollar bid appears to be developing with USD reclaiming to 102 handle heading for a 102.50 test, if the greenback can close towards 103 on the session this may encourage further short covering as US traders return to their desks tomorrow.
   

Overnight News of Note

• Traders Eye Chance Of More BoJ Tweaks As ‘Pandora’s Box Open’
• Polled Economists Say BoJ's Amamiya Is Top Governor Candidate
• Japan 10-Year Bond Yield Tops BoJ Policy Ceiling, Rises To 0.51%
• Economists Still See Recession This Year Despite Easing Inflation
• GOP Officials Won’t Budge On Debt Limit Softened By McCarthy
• US Stockpiles Natural Gas As Warm Temperatures Cuts Demand
• PBoC Injects Funds With Medium-Term Loans, Rate Unchanged
• China Boost To Flagging Global Economy Looms Amid Reopening
• China Braces For Covid Holiday Surge As People Leave Megacities
• UK, EU To Hold Fresh NI Protocol Talks Following Data Progress
• Treasuries Will Leave Europe’s Bonds In The Dust, Investors Say
• Credit Suisse Set To Slash 10% Of European Investment Bankers

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

CFTC Data

• USD net spec short grew in Jan 4-10 period as the $IDX +1.39%
• EUR$ +1.75% in period net spec longs +5,067 into strength now +134,982
• $JPY +0.91% in period, specs +11,487 contract short reduced to 35,377
• GBP$ +1.49% in period, specs 9,155 contracts into rise now short 29,456
• AUD leads major pairs higher +2.45% on upbeat China reopening specs +2,577
• $CAD -1.76% in period on upbeat recovery tones, specs -4,189 now -30,955
• BTC +5% in period, specs sell 983 contracts flip position to -594

(Source Reuters)

(Click on image to enlarge)

FX Options Expiration, New York Cut 10 am EST

• EUR/USD: 1.0900(EU478M), 1.0950 (EU457M)
• EUR/GBP: 0.9100 (EU308M)

(Options Data DTCC)
 

Technical & Trade Views

SP500 Bias: Bullish Above Bearish Below 3950 - 4022 Target Hit - New Pattern Emerging

• Primary support is 3950
• Primary objective is 4022
• Below 3940 opens 3890
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

EURUSD Bias: Bullish Above Bearish below 1.0735

• Primary support  is 1.0735
• Primary objective is 1.09
• Below 1.0730 opens 1.0610
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

GBPUSD Bias: Bullish Above Bearish below 1.21

• Primary support  is 1.21
• Primary objective 1.2315
• Below 1.21 opens 1.20
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

USDJPY Bias: Bullish above Bearish Below 130

• Primary resistance is 130
• Primary objective is 126.25
• Above 130.80 opens 132.20
• 20 Day VWAP bearish, 5 Day VWAP bearish

(Click on image to enlarge)

AUDUSD Bias: Bullish Above Bearish below .6920

• Primary support is .6920
• Primary objective is .7030
• Below .6900 opens .6820
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

BTCUSD Bias: Bullish Above Bearish below 20000 - 19155 Target Hit -New Pattern Emerging

• Primary support 20000
• Primary objective is 22400
• Below 19900 opens 19300
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

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