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– $NZD, $AUD, and $CAD are expected to be the most active majors vs $USD with 1W implied volatility at 8.77, 8.38, and 7.28 respectively.

– US Equities Futures: S&P 500 2,049.25 (-0.10%); Nasdaq 4,609.25 (-0.04%); Dow 30 17,436.5 (-0.07%).

– Asian equities update: Nikkei 225 18802.67 (+0.18%), Hang Seng 22062.66 (-0.34%), CSI 300 3833.73 (-0.12%).

– After the exuberance that heralded 2015 when Chinese equities were in ascendance, market analysts are taking a more cautious approach to what lies in store for the year ahead with China’s prospects for growth vying for investor attention with the pace and frequency of US interest rate rises. Both will be key to Hong Kong’s own fortunes in the year ahead with the local economy tied to China while the local currency is pegged to the US dollar, meaning the city’s interest rates have to shadow America’s. And while the US is expected to continue raising rates, the world’s second largest economy is busy cutting theirs as China’s central government struggles to hit growth targets. “Fears of a (China) hard landing persist in the market,” wrote economists at National Australia Bank. “(Chinese) interest rate cuts are likely in 2016 – reducing pressure on indebted firms – but the impact on savers could prove counter-productive to the transition towards a more consumption driven economy.”

– Japanese factory output and U.S. consumer confidence are among the few trading cues in the last trading week of the year, with Tokyo’s Nikkei 225 on track to be one of the best-performing major stock indices globally. The Japanese market is open from Monday through Wednesday in what is expected to be quiet trading in a holiday-shortened week. On Friday, Tokyo closed lower, as a strong yen dented exporters, with most Asian markets shut for a public holiday. However, Chinese shares rose on stimulus expectations, though gains were limited by the lack of trading enthusiasm as the year end approached, dealers said. Tokyo was dragged down by a stronger yen—bad news for exporters’ profitability—as the dollar slipped to 120.11 yen against 120.28 yen on Thursday in New York. “The yen is back where it was before US interest rates were raised,” Nomura strategist Juichi Wako told Bloomberg News. “The fact that markets aren’t pricing in the next interest rate hike in the US is the biggest factor” for the dollar’s weakness, Wako said. The Nikkei 225 slipped 0.11 percent, or 20.63 points, to 18,769.06 by the close. Over a holiday shortened week, it lost 1.15 percent. The broader Topix index of all first-section shares dropped 0.49 percent, or 7.43 points, to 1,516.19. It was down 1.36 percent this week. With just a few days left of 2015 trading, the Nikkei is among the best-performing stock markets globally, rising 7.55 percent since the start of the year. The Topix index is up 7.72 percent since the end of 2014.

– 2015 has been an historic year for oil markets, one that few will forget. At the beginning of the year, crude oil was well on its way to the lowest point since the financial crisis, dropping into the $40s in January. Prices bounced around, rebounded into the $60s by early summer, and then declined again for the rest of the year. As we close the books on 2015, crude oil is hovering just above an 11-year low point. Here’s a quick review of some of the key developments from 2015: 1. Ballooning inventories. U.S. oil inventory levels became a closely watched metric in 2015, as it provided tangible evidence that the world was awash in oil. Oil storage topped off at an 80-year high in April at 490 million barrels. Stocks were drawn down throughout the summer, but began rising again in the fall, once again hitting 490 million barrels in December. Inventories remain high throughout the world, and will need to be worked through before we see a substantial rebound in prices. OPEC kicked the oil price rout into overdrive in November 2014. Since then the cartel’s output has climbed by over 1 million barrels per day. Increases in output were seen in mainly Iraq (+900,000 – 1 million barrels per day) and Saudi Arabia (+600,000 bpd).

– The USD/JPY has trended nicely downwards last week. The price has moved down by 110 pips, now below the supply level at 120.50, and going towards the demand level at 120.00. There is a very strong Bearish Confirmation Pattern in the chart; plus it is likely that the price would go further south when momentum returns to the market. EUR/USD: Last week, this pair closed at 1.0952, on a slight bullish note. There may not be a serious moment in the market this week, owing to “thin” trading activity, but we could see surprise movements on some EUR pairs (like EURNZD, EURAUD and EURCAD). On the EUR/USD, there is likelihood that the resistance lines at 1.0950 and 1.0000 would be reached within the next several trading days. GBP/USD: What has happened so far on the Cable is what can be rightly called a rally in the context of an uptrend. The price has been going upward gradually since last week, while the outlook on the market remains bearish. Only a movement above the distribution territory at 1.5050 would render the bearish outlook invalid; otherwise, the current rally would be logically taken for another short-selling opportunity.

– Possible trend shift in USDCAD – going short.

– USD Continuing Claims (DEC 12): 2195k actual vs 2200k estimate, prior revised up to 2242k.

– USD Initial Jobless Claims (DEC 19): 267K actual vs 270k estimate, prior revised up to 272k.

– Global Bonds (10Y, Govt): Japan 0.271%; Germany 0.629%; France 0.987%; Canada 1.406%; UK 1.916%; US 2.240%; Australia 2.762%.

– Major news for today: CHF Total Sight Deposits , USD Dallas Fed Manufacturing Activity, USD Dallas Fed Manufacturing Activity.