Uncle Sam is about to drop its retail gross sales figures for the month of December!
What are the markets anticipating and the way may the report have an effect on USD/JPY’s uptrend?
Earlier than transferring on, ICYMI, yesterday’s watchlist checked out EUR/AUD’s pattern line help forward of China’s information dump. Make sure to try if it’s nonetheless a superb play!
And now for the headlines that rocked the markets within the final buying and selling periods:
Contemporary Market Headlines & Financial Information:
China’s GDP grew by 5.2% in 2023, greater than the federal government’s 5.0% purpose and Q3’s 4.9% annual progress
China’s industrial manufacturing for December: 6.8% y/y (6.6% y/y anticipated and former)
China’s mounted asset funding for December: 3.0% ytd/y (2.9% ytd/y forecast and former)
China’s unemployment price ticked greater from 5.0% to five.1% in December
China’s retail gross sales slowed down from 10.1% y/y to 7.4% y/y in December
Reuters’ Tankan ballot confirmed morale amongst massive Japanese producers slid for the primary time in 4 months in January, down from +12 to +6; the Non-manufacturing index improved from +26 to +29
U.Okay.’s inflation unexpectedly picked up in December – The annual CPI is up from 3.9% to 4.0% (3.8% anticipated); core CPI remained at 5.1% (4.9% anticipated)
U.Okay.’s PPI enter in December: -1.2% m/m (-0.6% m/m forecast, -0.4% m/m earlier); PPI output at -0.6% m/m (-0.2% m/m forecast, 0.0% m/m earlier)
ECB President Lagarde: Aggressive price lower bets “should not serving to” the ECB’s combat towards excessive inflation
Value Motion Information
Danger aversion remained the secret through the Asian and early European session buying and selling.
Latest headlines didn’t assist. China’s annual progress barely missed market estimates whereas retail exercise rose the slowest in three months in December.
In the meantime, European Central Financial institution (ECB) President Lagarde shared that aggressive price hike speculations are “not serving to” the ECB’s combat towards excessive inflation, which added to bets that the markets must tweak their costs to mirror fewer or not less than much less aggressive price cuts from the foremost central banks.
Not surprisingly, the China-related AUD took hits from the weak(ish) Chinese language information and total danger aversion.
AUD is buying and selling within the crimson throughout the board, with the deepest losses recorded towards GBP and USD whereas the least losses are seen towards NZD and JPY.
Upcoming Potential Catalysts on the Financial Calendar:
U.Okay.’s home value index at 9:30 am GMT
Eurozone’s closing December CPI at 10:00 am GMT
U.S. retail gross sales at 1:30 pm GMT
FOMC member Michael Barr to present a speech at 2:00 pm GMT
FOMC member Michelle Bowman to present a speech at 2:00 pm GMT
U.S. industrial manufacturing at 2:15 pm GMT
ECB President Lagarde to present a speech at 3:15 pm GMT
Japan’s core equipment orders at 11:50 pm GMT
Australia’s MI inflation expectations at 12:00 am GMT (Jan 18)
Australia’s labor market information at 12:30 am GMT (Jan 18)
Use our new Foreign money Warmth Map to shortly see a visible overview of the foreign exchange market’s value motion! ️
In just a few hours, we’ll see the U.S. December retail gross sales report. Phrase round is that we’ll see barely slower exercise, with annual retail exercise ticking decrease from 4.1% to 4.0% whereas core retail exercise retains its 0.2% uptick.
Greater retail numbers would possible give merchants another reason to purchase the U.S. greenback. In case you’re simply beginning your week, the Buck has been making pips rain as some merchants modify their expectations to mirror fewer rate of interest cuts or not less than an extended interval earlier than the primary price lower from the foremost central banks.
In the meantime, the Japanese yen is discovering it arduous to get traction from the chance aversion. Japan has additionally just lately printed spotty financial exercise studies, which doesn’t give JPY bulls confidence.
Can USD/JPY lengthen its January uptrend right now?
The pair appears to have discovered resistance from the R1 (147.80) Pivot Level line regardless of early European session gamers nonetheless feeling the general danger aversion.
The 147.00 – 147.30 space of curiosity could attract bulls if we do see USD/JPY pull again to the extent. As you’ll be able to see, it’s near the pattern line and 100 SMA help within the 15-minute time-frame.
If USD/JPY finds help within the space, then we may even see the pair revisit its weekly highs close to 148.80. USD/JPY could even hit new intraweek highs if there’s a contemporary elementary catalyst for extra USD positive factors.
Watch the U.S. retail gross sales report and the general danger sentiment image to see if (a) USD/JPY can drop down all of the to the pattern line zone earlier than discovering help or if (b) USD/JPY will discover sufficient elementary and technical momentum to increase its January downtrend.
Good luck and good buying and selling, errbody!