Daily Market News - 17.01.2017
UK PM's Brexit speech speaking
It The pound was again the main focus during the Asia-Pacific session, an article in the UK's Telegraph cited a 12-point plan for Brexit, with PM May vowing a clean break that does not leave the UK in a 'half in, half out' position. Intraday spec accounts led the run lower from $1.2057 to $1.2015. As the market digested the article, it became clear it was similar to stories in the press over the weekend. A short squeeze ensued taking the pound to a high of $1.2077 and was last at $1.2071. Elsewhere, markets were a little more mundane, dollar-yen opened at Y114.20 and held a Y113.83 to Y114.28 range, last at Y114.00. Euro-dollar edge higher from $1.0598 to $1.0630 and was last at $1.0624. Aussie-dollar consolidated in a $0.7465 to $0.7490 range, last at $0.7482.
Tuesday is a busy day on the calendar, with a host of data in Europe and a keynote policy speech on Brexit from UK Prime Minister Theresa May. The European calendar kicks off at 07:00 GMT, with the publication of the ACEA car registrations data. ECB Gov. Council member Ewald Nowotny will give a keynote speech at Euro Moneym Conference, in Vienna, starting at 08:15 GMT, before the ECB publishes the Euro area Bank Lending Survey at 09:00 GMT. The main UK data will be published at 09:30 GMT, when the consumer prices, producer prices and ONS house price data will be released.UK inflation is expected to have resumed its upward ascent in December, with a 0.1 percentage point rise in m/m CPI and a 0.2 pp rise in y/y% CPI penciled innby analysts. The year-on-year RPI rate is also expected to edge 0.1pp higher to 2.3%.
CPI inflation is almost certain to surpass its 2% target by the midway point of 2017, a trend likely to be reinforced beyond this should sterling remain at its currently depressed levels. On the Continent, the German ZEW Survey will be released at 10:00 GMT. ECB Nowotny appears again at 11:00 GMT, participating in a panel discussion "Euro reforms in turbulent times”, in Vienna. UK PM Theresa May will speak late morning, with reports suggesting 11:45 GMT, at Lancaster House in London. The Sunday press appear to have been well briefed by officials ahead of the PM's speech, with the theme appearing to be the PM will follow a so called 'hard Brexit', prioritizing control of borders and jurisdiction of UK courts over trade matters. May's foretold comments would appear to be very similar to those she outlined in a TV interview on January 8, although she did then say she would look for the best deal possible or UK companies.
Across the Atlantic, the US calendar gets underway at 13:30 GMT, with the release of the Empire State Manufacturing survey. Canadian non-residential building Investment data will be released at the same time. At 13:45 GMT, New York Federal Reserve Bank President William Dudley speaks about Evolving Consumer Behavior at Retail's BIG Show 2017 at the Jacob K. Javits Convention Center in N.Y., with audience Q&A. Federal Reserve Gov. Lael Brainard discusses the impact of fiscal policy on monetary policy at the Brookings Institution in Washington, D.C., starting at 15:00 GMT San Francisco Federal Reserve Bank President John C. Williams is the keynote speaker at the Business Review Economic Forecast at Sacramento State University in Calif., with media and audience Q&A, starting at 23:00 GMT.
The pair remains a little heavy as it trades back below the 100-WMA (¥114.61) with bears needing a close below ¥113.04 to confirm a break of the 55-DMA and hint at a move back to the 100-DMA (¥108.59). Layers of resistance remain in place with bulls needing a close above Y114.48 to gain breathing room and above ¥115.63 to confirm an easing of bearish pressure and shift focus hack to ¥116.44-117.53 where the 21-DMA is found.
Spot Gold last up $1.30 at $1,203.80 per ounce, in a $1,205.35 to $1,202.55 range so far this morning in Asia, with the market trading quietly after and abbreviated session on Monday for the MLK holiday saw Feb'17 Gold up $6.30 at $1,202.60. The main focus for Gold will be UK PM May' Brexit speech later today, which could see further volatility, after fears of a hard Brexit saw gold rally on Monday.