Market Roundup
• French CPI (YoY) 1.5%,1.4% forecast, 1.0% previous
• French Dec CPI (MoM) 0.5%,0.4% forecast, -0.1% previous
• French Dec HICP (MoM) 0.5%,0.5% forecast, 0.1% previous
• Spanish Dec CPI (MoM) -0.1% , -0.1% forecast ,0.2% previous
• Spanish Dec CPI (YoY) 0.8%,0.8% forecast, 0.5% previous
• Spanish Dec HICP (MoM) -0.1%,-0.1% forecast, 0.0% previous
• German GDP Annual 0.60%,0.60% forecast, 1.50% previous
• UK Dec Core CPI MoM (MoM) 0.0%,0.2% forecast, 0.2% previous
• UK Dec Core CPI (YoY) 1.4%,1.7% forecast, 1.7% previous
• UK Dec CPI (YoY) 1.3% ,1.5% forecast, 1.5% previous
• UK Dec CPI (MoM) 0.0%,0.2% forecast, 0.2% previous
• UK Dec PI Input (MoM) 0.1%,0.3% forecast, 0.5% previous
• EU Nov Industrial Production (MoM) 0.2%,0.3% forecast, -0.9% previous
• EU Nov Industrial Production (YoY) -1.5%,-1.1% forecast, -2.6% previous
• EU Nov Trade Balance 20.7B, 23.3B forecast, 28.0B previous
Looking Ahead - Economic Data (GMT)
• 13:00 Russia Central Bank Reserves (USD) 549.8B previous
• 13:30 US Dec Core PPI (MoM) 0.2%,-0.2% previous
• 13:30 US Jan NY Empire State Manufacturing Index 3.55, 3.50 previous
• 13:30 US Dec PPI (MoM) 0.2%,0.0% previous
• 15:30 US Crude Oil Inventories -0.474M, 1.164M previous
Looking Ahead - Events, Other Releases (GMT)
• 16:00 US FOMC Member Harker Speech
• 17:00 US FOMC Member Kaplan Speech
Fx Beat
EUR/USD: The euro edged higher against the U.S. dollar on Wednesday, as investors awaited the signing of a U.S.-China trade deal. U.S. President Donald Trump is slated to sign the Phase 1 trade agreement with Chinese Vice Premier Liu He at the White House at 1630 GMT.Washington has already agreed to suspend tariffs on $160 billion of some Chinese-made electronics, and to halve existing tariffs on $120 billion of other goods to 7.5%.But it will leave in place 25% tariffs on a vast, $250 billion array of Chinese industrial goods and components used by U.S. manufacturers. The euro was up 0.19 percent at $1.1148. Immediate resistance can be seen at 1.1157 (Daily High), an upside break can trigger rise towards 1.1200 (Psychological level).On the downside, immediate support is seen at 1.1133 (21 DMA), a break below could take the pair towards 1.1065 (100 DMA).
GBP/USD: Sterling edged lower against dollar on Wednesday, after data showed UK inflation rose at its weakest rate in three years, ramping up expectations of a rate cut from the Bank of England at its January meeting. Consumer prices rose at an annual rate of 1.3% in December compared with 1.5% in November, marking the smallest increase since November 2016. The pound fell as much as 0.25% against the U.S. dollar to $1.2985 following the inflation release and was last at $1.3008. Immediate resistance can be seen at 1.3063 (5 DMA), an upside break can trigger rise towards 1.3098 (11 DMA).On the downside, immediate support is seen at 1.2961 (50 DMA), a break below could take the pair towards 1.2900 (Psychological level).
USD/CHF: The dollar declined against the Swiss franc on Wednesday, as investors awaited a China-U.S. trade deal they hope will spur world growth. Investors were keenly awaiting the details of the Phase 1 agreement. A source on Tuesday said China has pledged to buy almost $80 billion of additional manufactured goods from the United States over the next two years as part of a truce, though some U.S. trade experts call it an unrealistic target. At (GMT 12:08), Greenback fell 0.20% versus the Swiss franc to 0.9653. Immediate resistance can be seen at 0.9696 (5 DMA), an upside break can trigger rise towards 0.9742 (21 DMA).On the downside, immediate support is seen at 0.9637 (Lower BB), a break below could take the pair towards 0.9600 (Psychological level).
USD/JPY: The dollar strengthened against the Japanese yen on Wednesday, as euphoria over a U.S.-China trade deal was tempered by U.S. Treasury Secretary Steven Mnuchin saying tariffs on Chinese goods would remain in place for now.. Treasury Secretary Steven Mnuchin late on Tuesday said that the United States would keep in place its tariffs on Chinese goods until the completion of a second phase trade agreement. The 18-month trade spat should enter a quieter phase as U.S. President Donald Trump and Chinese Vice Premier Liu He sign an initial agreement that would boost Chinese purchases of U.S. manufactured and agricultural goods, energy and services. Strong resistance can be seen at 110.25 (Higher BB), an upside break can trigger rise towards 110.67 (22nd May high).On the downside, immediate support is seen at 109.75 (5 DMA), a break below could take the pair towards 109.19 (9 DMA).
Equities Recap
European shares were flat on Wednesday ahead of the signing of an initial trade deal between Washington and Beijing, as comments from the U.S. Treasury Secretary on China tariffs somewhat dimmed optimism.
At (GMT 12:25),UK's benchmark FTSE 100 was last trading higher at 0.19 percent, Germany's Dax was down by 0.11 percent, France’s CAC was last down by 0.13 percent.
Commodities Recap
Gold prices rose on Wednesday as investors sought safer assets amid uncertainty about the effectiveness of the U.S.-China Phase 1 trade deal after a top U.S. official said tariffs on Chinese goods would stay in place even after the agreement is signed.
Spot gold rose 0.3% to $1,551.38 per ounce by 0332 GMT. Prices fell to their lowest since Jan. 3 at $1,535.63 on Tuesday. U.S. gold futures gained 0.5% to $1,552.30.
Oil prices slipped on Wednesday on concerns that the pending Phase 1 trade deal between the United States and China, the world’s biggest oil users, may not boost demand as the U.S. intends to keep tariffs on Chinese goods until a second phase.
Brent crude was down 19 cents, or 0.3%, at $64.30 per barrel by 0428 GMT. U.S. West Texas Intermediate crude futures were down 19 cents, or 0.3%, at $58.04 a barrel.
Treasuries Recap
Euro zone bond yields fell from two-week highs on Wednesday after the U.S. Treasury Secretary said tariffs would remain in place following the signing of an initial U.S.-China trade deal, injecting some caution into markets.
The 10-year German bond yield fell 3 basis points in early trade on Wednesday to -0.199%, still not too far off the more than six-month highs of -0.157% touched at the start of January. The French 10-year yield weakened 3 basis points to 0.051%.
