Talking Points:
British Pound to Rise if Upbeat UK CPI Data Reboots BOE Rate Hike Bets
Aussie Dollar Gains as Market Mood Firms Despite Soft China GDP Print
Gauge Trends and Spot Reversals in Leading Currencies with DailyFX SSI
UK CPI data headlines the economic calendar in European trading hours. The core year-on-year inflation rate is expected to register at 1.2 percent in December, unchanged from the prior month. Leading survey data hints downward price pressures may have waned however, opening the door for an upside surprise. Such an outcome may breathe a big of life into rate hike speculation, offering a lift to the British Pound. Follow-on comments from BOE Governor Mark Carney represent a bit of wild card and may either amplify or undermine the initial post-CPI response, depending on the central bank chief’s tone.
A recovery in risk appetite shaped currency market dynamics in overnight trade. The sentiment-linked Australian Dollar rose alongside Asian shares while the Canadian Dollar tracked a recovery in crude oil prices. Anti-risk and funding currencies including the Euro, Yen and Swiss Franc underperformed. The chipper mood emerged despite a disappointing set of Chinese GDP figures that showed the year-on-year growth rate slowed to 6.8 percent, the weakest in seven years.
Getting the China GDP print out of the way may have been reason enough for a corrective recovery considering central role of news-flow from the East Asian giant as a driver of risk aversion since the start of the year. Some give-back seems reasonable given recent positioning swings. Using the S&P 500 futures as a baseline, last week’s COT data showed speculators in full-size contracts were the least net-long since March while traders of e-minis registered as the most net-short in two months. Pre-market cues hint the recovery in sentiment may continue as European and US bourses come online.
Losing Money Trading Forex? This Might Be Why.
Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
22:30
AUD
Weekly Consumer Confidence Index (JAN 17)
113.2
–
114.1
02:00
CNY
Industrial Production YTD (YoY) (DEC)
6.1%
6.1%
6.1%
02:00
CNY
Industrial Production (YoY) (DEC)
5.9%
6.0%
6.2%
02:00
CNY
Retail Sales (YoY) (DEC)
11.1%
11.3%
11.2%
02:00
CNY
Retail Sales YTD (YoY) (DEC)
10.7%
10.7%
10.6%
02:00
CNY
Fixed Assets Ex Rural YTD (YoY) (DEC)
10.0%
10.2%
10.2%
02:00
CNY
GDP YTD (YoY) (4Q)
6.9%
6.9%
6.9%
02:00
CNY
GDP SA QoQ (4Q)
1.6%
1.8%
1.8%
02:00
CNY
GDP (YoY) (4Q)
6.8%
6.9%
6.9%
06:00
JPY
Machine Tool Orders (YoY) (DEC F)
-25.7%
–
-25.8%
06:30
JPY
Tokyo Condominium Sales (YoY) (DEC)
-34.1%
–
4.8%
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
07:00
EUR
German CPI (MoM) (DEC F)
-0.1%
-0.1%
Medium
07:00
EUR
German CPI (YoY) (DEC F)
0.3%
0.3%
Medium
07:00
EUR
German CPI – EU Harmonized (MoM) (DEC F)
0.0%
0.0%
Low
07:00
EUR
German CPI – EU Harmonized (YoY) (DEC F)
0.2%
0.2%
Low
08:15
CHF
Producer & Import Prices (MoM) (DEC)
-0.2%
0.4%
Medium
08:15
CHF
Producer & Import Prices (YoY) (DEC)
-5.4%
-5.5%
Medium
09:00
EUR
ECB Current Account SA (NOV)
–
20.4b
Low
09:00
EUR
ECB Current Account NSA (NOV)
–
25.9b
Low
09:30
GBP
CPI (MoM) (DEC)
0.0%
0.0%
High
09:30
GBP
CPI (YoY) (DEC)
0.2%
0.1%
High
09:30
GBP
CPI Core (YoY) (DEC)
1.2%
1.2%
High
09:30
GBP
RPI (MoM) (DEC)
0.2%
0.1%
Low
09:30
GBP
RPI (YoY) (DEC)
1.1%
1.1%
Low
09:30
GBP
RPI Ex Mort Int. Payments (YoY) (DEC)
1.1%
1.1%
Low
09:30
GBP
PPI Input NSA (MoM) (DEC)
-1.7%
-1.6%
Low
09:30
GBP
PPI Input NSA (YoY) (DEC)
-11.7%
-13.1%
Low
09:30
GBP
PPI Output NSA (MoM) (DEC)
-0.2%
-0.2%
Medium
09:30
GBP
PPI Output NSA (YoY) (DEC)
-1.2%
-1.5%
Medium
09:30
GBP
PPI Output Core NSA (MoM) (DEC)
0.0%
-0.2%
Low
09:30
GBP
PPI Output Core NSA (YoY) (DEC)
-0.1%
-0.1%
Low
09:30
GBP
ONS House Price (YoY) (NOV)
–
7.0%
Medium
10:00
EUR
Eurozone Construction Output (MoM) (NOV)
–
0.5%
Low
10:00
EUR
Eurozone Construction Output (YoY) (NOV)
–
1.1%
Low
10:00
EUR
Eurozone CPI (MoM) (DEC)
0.0%
-0.1%
Medium
10:00
EUR
Eurozone CPI (YoY) (DEC F)
0.2%
0.2%
Medium
10:00
EUR
Eurozone CPI Core (YoY) (DEC F)
0.9%
0.9%
Medium
10:00
EUR
German ZEW Survey Current Situation (JAN)
53.1
55.0
Medium
10:00
EUR
German ZEW Survey Expectations (JAN)
8.0
16.1
Medium
10:00
EUR
Eurozone ZEW Survey Expectations (JAN)
–
33.9
Medium
12:00
GBP
BOE Governor Carney Speaks in London
–
–
Medium
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EUR/USD
1.0755
1.0828
1.0860
1.0901
1.0933
1.0974
1.1047
GBP/USD
1.4096
1.4182
1.4212
1.4268
1.4298
1.4354
1.4440
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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