Daily Market News - 13.01.2017 by CentroFX
Quiet Fridey to end week
It was a quiet end to another busy week in the Asia-Pacific region, the dollar was mostly unchanged against its peers, with a couple of exceptions. Dollar-yen pushed above the Y115 handle and held a Y114.55 to Y115.18 range, supported by buying from Japanese Trust banks and also demand into the Tokyo-fix. Dollar-yen was last at Y115.10. Aussie-dollar opened at $0.7484 and was contained within a $0.7477 to $0.7509 range, last at $0.7483. Dollar-Canada edged higher from C$1.3230 to C$1.3268, with demand mainly seen from Japanese accounts. Meanwhile, Euro-dollar carved out a less-than-exciting $1.0604 to $1.0620 range, stifled by large options expiries for today. Euro-dollar was last at $1.0610.
It is a fairly quiet end to the week, but there is still plenty on the calendar to keep traders interested. The European calendar kicks off at 07:00 GMT, with the publication of the German wholesale prices data. At 08:00 GMT, Spanish final December harmonized inflation data will cross the wire. The UK comes into focus at 09:30 GMT, with the release of the Bank of England quarterly credit conditions survey. At the same time, BOE Monetary Policy Committee member Michael Saunders is slated to speak in London. Across the Atlantic, the US calendar gets underway at 13:30 GMT, with the release of the December retail sales data and the latest PPI report. Retail sales are forecast to jump by 0.7% in December after a very modest 0.1% gain in November. Seasonally adjusted industry motor vehicle sales surged in December, while AAA reported that gasoline prices were roughly unchanged in mid-December compared with one month earlier. Retail sales are expected to rise 0.5% excluding motor vehicles after November's 0.2% gain. Final demand PPI is expected to rise 0.3% in December. Food prices are expected to post a more modest increase after a 0.6% gain in November, but energy prices are forecast to rebound after a small November decline.
Excluding food and energy prices, PPI is forecast to be up 0.2% after a 0.4% increase in November. Philadelphia Federal Reserve Bank President Harker discusses economic mobility at Benjamin Franklin Birthday Celebration in Philadelphia, Pa., with an audience Q&A, starting at 14:30 GMT. At 15:00 GMT, the January University of Michigan Sentiment Index will be released, alongside the November business inventories data. The Michigan Sentiment index is expected to tick up further to a reading of 98.7 in early-January from 98.2 in December. Business inventories are expected to rise 0.6% in November. Factory inventories were already reported as up 0.2% in the month. The advance report showed a 0.9% gain for wholesale inventories and a 1.0% rise for retail inventories. An MN calculation with the data available to this point also suggests a 0.7% gain for business inventories, barring in large revisions to the retail and wholesale data next week. As for sales, factory shipments fell 0.1% and retail trade sales were flat in the advance retail sales report released last month. The NY Fed's latest GDP Nowcast will be released at 16:15 GMT.
Bears take comfort in the lack of follow through on Thursday’s pop above the 55-DMA especially when combined with daily studies approaching O/B, the significance of the $1.0695 resistance and the Bollinger band top (1.0644) limiting follow through. Bulls need a close above $1.0695 to end bearish hopes and shift immediate bullish focus to $1.0858-1.0952. Bears now need a close below $1.0553 to shift initial focus back to $1.0453.
Spot Gold last down $1.80 at $1193.53 per ounce, in a $1196.80 to $1,192.95 range so far this morning in Asia, with the market easing slightly in mixed trade. Thursday's trade saw gold benefit from a falling dollar. Spot gold was closing near $1,200.00 per ounce, in the middle of the day's $1,190.84 to $1,207.07 range. Earlier, gold vaulted its 55-day moving average around $1,197 to test high levels last seen Nov 23, when the precious metal peaked at $1,215.06.A break above $1,215 will target other old highs near $1,221.16, seen Nov. 22, $1,231.52 seen Nov 17, and $1,233.18 seen Nov. 6. "While many people are focused on the USD and bonds in connection with the 'Trumpflation trade', we argue that gold has an important intermarket role to play here as well," said George Davis, chief technical analyst at RBC Capital Markets.