 Welcome, traders, to Tick Mill Weekly Market Outlook with me, Patrick Munley, for week commencing the 12th of December. Markets are firmly expecting the Federal Reserve to offer a 50 basis point hike at the 14th of December of the Federal Open Market Committee meeting, after already implementing 375 basis points of rate hikes, including consecutive 75 basis point moves at the previous four meetings. The central bank has been a pain to point out that despite smaller individual steps, we are likely to end up at a higher ultimate interest rate than the central bank indicated was likely back in September. Its forecasts are likely to show the federal funds rate rising by 5%, with potential slight upward revisions to near-term GDP and inflation and a lower unemployment rate to justify this. Officials have been suggesting they may cut rates until 2024, and markets suspect Fed share power will echo this sentiment. Nonetheless, this hawkish rhetoric is likely to result in concern that the recent steep falls in Treasury yields in the dollar coupled with a narrowing of credit spreads is loosening financial conditions, the exact opposite of what the Fed wants to see as it battles to get inflation lower. In terms of market views, markets continue to expect that final 50 basis point hike in February, but with recession risks mounting, actual dampen inflation pressures further, markets look for rate cuts from the 3rd quarter of next year. Ahead of that announcement, we will have the consumer price inflation data tomorrow. The surprisingly soft core CPI print was the catalyst of the recent moves lower in Treasury yields in the dollar, and a second concessive low reading would reinforce the market conviction that rate cuts are going to be on the agenda for the 2nd half of 2023. This means Powell will have to battle hard with his commentary in the post-FOMC Prefs conference to prevent financial conditions from loosening too much more based on that inflation print on Tuesday. From a technical perspective, the dollar index continues to trade just shy of our target level. We're looking for a push down into the 102.90 to 102.50 area. From there, we're anticipating a bounce in terms of the dollar. So I'm watching for bullish reversal patterns in that area to target a move back up at minimum to test trend channel resistance coming in just above 106. Moving to the Eurozone. Another jumbo rate hike has more likely been priced in recent days. Macro data since the European Central Bank's October meeting has shown resilience in the Eurozone economy in the 3rd quarter, but also confirmed a further cooling of the economy in the last few months of the year. The drop in headline inflation, as little as it says about the impact of the rate hike so far, could at least take away some of the urgency to continue with jumbo rate hikes. At the same time, the ECB seems to be increasingly concerned that the fiscal stimulus and support measures announced could extend the inflation repressions. ECB executive board member Schnabel has been one of the more influential social voices to watch, definitely since the summer with her Jackson Hole speech. Judging from her recent comments, the incoming data so far suggests that the room for slowing down the pace of interest rate adjustments remains limited. Even as we are approaching estimates of the neutral rate, 75 basis points is clearly on the table at Thursday's meeting. Markets think that the risk of a 75 basis point rate hike at this meeting has clearly increased. Next to the rate hike, the ECB is likely to set out some general principles of how it plans to reduce its bond holdings. Markets expect the ECB to eventually reduce its reinvestments of bond purchases but to refrain from outright selling bonds. Besides the ECB industrial data for the eurozone out on Wednesday, don't expect anything that will influence the government council meeting too much from that. While the tickdown in production is to be expected, the fact that industry has outperformed recent expectations is likely to uphold. Friday data is also interesting as the PMI will show how the economy is faring at the end of the fourth quarter. Expect it to continue to signal a contraction but just how deep is the question relevant for markets and policymakers. Finally, trading goods data also due Friday and will provide a clue on how the trade deficit is faring, which is very important for euro fair value. From a technical perspective, euro dollar holding support just above 105, looking for a final push up here into our target zone 10620, 10650. From there, as long as we maintain momentum divergence, I'm looking for a bearish reversal patterns there to engage on the short side, looking at a minimum three-way corrected move down into ascending trendline sport 10380s and the high volume node here at 10360s. Moving to the UK and again as with the US and the eurozone, the focus is really going to be on central bank here. There's probably just about enough in the latest UK data and recent autumn statement for the Bank of England to pivot back to a 50 basis point rate at its meeting on Thursday. Inflation looks to repeat, although BOE Hawks will be keeping an eye on the data due to a day prior to its announcement. The headline CPA is released Wednesday and is likely to dip. However, core could be a little bit more sticky and last month's data saw core services inflation come in slightly higher than the bank had forecast in November. Jobs data has also hinted still at persistent labor shortages, which will keep the pressure on wage growth. Still, Chancellor Jeremy Hunt probably did enough last month to lower concerns that the BOE and the Treasury are working at cross purposes, even if the fiscal tightening announced won't have a huge bearing on the economy. Relative to the bank's forecast released last month, markets expect a 50 basis point hike this week and another 50 in February, which is likely to mark the peak of the tightening cycle in the UK. So from a technical perspective, sterling clinging onto trend line support just above the 122 level. As it does, we are looking for a break back through 12340s onto our target zone just below 125. At this stage, it would really take a loss of 121 to suggest a more meaningful high in place and takes back down to test support just ahead of 119. Moving to Japan, in terms of the data slate there this week, nothing on Monday or Tuesday. So heading into Wednesday, we get October machinery orders looking for a positive 2.3% up from a negative 4.6% last month. Data is volatile, but points to downside risks in capital spending. We also get into October industrial production, final estimate looking for a negative 2.6% print there. And then on Friday, we get a Nikkei manufacturing PMI looking for 49 there, services PMI 50.3 so just in that expansionary territory. Easing of restrictions have been a key support, but the outlook ahead remains challenging for the region. So heading to the charts, we are watching the dolly in here in this descending trend channel. So I'm looking for any move up into the 138.20s, watching the bearish reversal patterns there to reengage on the short side, looking for a move then back down through the pivot here at 136.20s, price support 135.60s on then to our target zone just ahead of 132 before looking for another corrected leg to develop. At this stage, we're really taking close back through 139.90s to suggest a more meaningful low in place and another leg to the upside likely to test into 142.20s. Down under in Australia, in terms of data next week, consumer sentiment on Tuesday, looking for a 78 there, 70 to new extreme cycle lows in November. We also get a B business survey 22 last time out, conditions still elevated in October, but confidence is started to evaporate. On Wednesday, we'll hear from Governor Lowe, who gives a keynote address at the Aussie Net Pay Summit in Sydney. And heading into Thursday, inflation expectations 6% last time out, falling petrol prices should ease inflation expectations down under. We also get labor employment, looking for a 17 versus a 32.2 last time out, potential for a 27 print, leading indicators moderated, but remain at robust levels, hinting at stronger employment and falling unemployment. And that rounds out the data slate down under in Australia. So from the technical perspective, the Aussie Dollar Health support at the 66.60s as it does so now, we're going to look for a breakthrough. Let's just draw in some trend line resistance here. So we've got a move to get through now. 68.15 level should then take us up to our target zone just ahead of 69. At this stage, it would really take a loss of support back to the 66.40s, to open a move back down to test 65.80s as the next outside level. But remember, we still have this primary trend line in play. And as it does so, we will as it as it that maintain support, we are looking for further upside in the Aussie Dollar. So let's see if we can get a 69 test for a weekly projected range resistance just above at 69.40s. Rounding out this week's outlook, let's check in with Bitcoin, see where we're up to. Bitcoin sitting just above support here at the 16,800 as it does. I'm looking for a breakthrough, this trend line resistance here, internal trend line resistance coming in 17,250. We can get through there on a closing basis and we're looking for our target zone 17,800. And that concludes the weekly market outlook for week commencing the 12th of December. As always, trade us, plan the trade, trade the plan and most importantly, manage your risk. Until next time, thanks very much.