Daily Market News - 18.01.2017 by CentroFX
Dollar gently bid across the board
Following on from the sell-off in the US Dollar overnight, retracement was the theme for the day in Asia with the Dollar gently bid across the board with cable seen looking the heaviest of the majors while Dollar-Yen retains a gentle bid tone. Comments from San Francisco Federal Reserve President John Williams continued during the morning Asian session and with a good case for 3 hikes seen in 2017 amid calls for gradual U.S. rate hikes.
The European data calendar gets underway early Wednesday, with the publication of the German final December inflation data at 07:00 GMT. The UK's latest employment report will be published at 09:30 GMT. Analysts expect headline UK unemployment to hold firm at 4.8% in the three months to November, highlighting the continued resilience of the UK labour market six months on from the EU referendum. Although the number of people classified as unemployed rose 12k in October, just the third positive change exhibited in 2016 so far, it was not a large enough rise to push the headline rate above 4.8% (the lowest rate of unemployment since the three months to September 2005), at which it fell to in September. Euro area data expected at 10:00 GMT includes the latest construction production numbers and the December final inflation data.
At midday, the US MBA weekly applications index will be published. In the UK, Prime Minister Theresa May will follow up her Brexit speech with PMQs in the Commons. At 12:30 GMT, Bundesbank Board member Carl-Ludwig Thiele sits on a panel-discussion on "Blockchain Technology", in Berlin. The main US data releases come at 13:30 GMT, with the publication of the December CPI data and the NY Fed Business Leaders Survey. Final demand CPI is expected to rise by 0.3% in December, an acceleration from the 0.2% increase in November. Excluding food and energy prices, CPI is forecast to rise by 0.2% in December, the same as in November. The latest Redbook Retail Sales Index will be released at 13:55 GMT.
Federal Reserve Bank of Dallas President Rob Kaplan speaks at the University of Texas at Austin 2017 Business Forecast in Dallas, Texas, with media and audience Q&A, starting at 14:00 GMT. At 14:15 GMT, the US industrial production data will cross the wire, followed by the NAHB Home Builder Index at 15:00 GMT. Industrial production is expected to rise by 0.6% in December after a 0.4% decline in the previous month. The ISM production index jumped to 60.3 in December from 56.0 in the previous month. Capacity utilization is forecast to rise to 75.4%.
The Bank of Canada will announce their latest policy decision at 15:00 GMT. Also at 15:00 GMT, Minneapolis Federal Reserve Bank President Kashkari speaks on Economic Opportunity & Inclusive Growth at Minneapolis Urban League in Minn., with media and audience Q&A. To round the day off, at 20:00 GMT, Federal Reserve Chair Janet Yellen gives a speech on "The Goals of Monetary Policy and How We Pursue Them" to the Commonwealth Club in San Francisco, with audience Q&A Late US data will see the TICS released at 21:00 GMT.
The close above $1.0695 ends bearish hopes and sees bulls initially targeting the $1.0848-73 resistance region where the 100-DMA is located. Daily studies approaching O/B remain the key concern for bulls. Initial support is noted at $1.0685 with bears needing a close below to ease bullish pressure. Below the 55-DMA is then needed to shift focus to $1.0453.
WTI crude Oil futures for Feb'17 delivery last up $0.03 at $52.51 per barrel, after a $52.57 to $52.46 range in Asia today, with the market firmly slightly ahead of the EIA inventory data later today. NYMEX February light sweet crude oil futures settled up $0.11 at $52.48 per barrel on Tuesday, after trading in a $52.12 to $53.52 range. So far in 2017, the front contract has traded in a range of $50.71, seen Jan. 10, to $55.24, seen Jan. 3. A weaker dollar has served to underpin crude, but prices remained weighed by uncertainty about adherence to the OPEC/non-OPEC agreement to cut production, hammered out in late November.