Talking Points:
- British Pound to Rise if Upbeat UK CPI Data Reboots BOE Rate Hike Bets
- Aussie Dollar Gains as Market Mood Firms Despite Soft China GDP Print
- Gauge Trends and Spot Reversals in Leading Currencies with DailyFX SSI
UK CPI data headlines the economic calendar in European trading hours. The core year-on-year inflation rate is expected to register at 1.2 percent in December, unchanged from the prior month. Leading survey data hints downward price pressures may have waned however, opening the door for an upside surprise. Such an outcome may breathe a big of life into rate hike speculation, offering a lift to the British Pound. Follow-on comments from BOE Governor Mark Carney represent a bit of wild card and may either amplify or undermine the initial post-CPI response, depending on the central bank chief’s tone.
A recovery in risk appetite shaped currency market dynamics in overnight trade. The sentiment-linked Australian Dollar rose alongside Asian shares while the Canadian Dollar tracked a recovery in crude oil prices. Anti-risk and funding currencies including the Euro, Yen and Swiss Franc underperformed. The chipper mood emerged despite a disappointing set of Chinese GDP figures that showed the year-on-year growth rate slowed to 6.8 percent, the weakest in seven years.
Getting the China GDP print out of the way may have been reason enough for a corrective recovery considering central role of news-flow from the East Asian giant as a driver of risk aversion since the start of the year. Some give-back seems reasonable given recent positioning swings. Using the S&P 500 futures as a baseline, last week’s COT data showed speculators in full-size contracts were the least net-long since March while traders of e-minis registered as the most net-short in two months. Pre-market cues hint the recovery in sentiment may continue as European and US bourses come online.
Losing Money Trading Forex? This Might Be Why.
Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 22:30 | AUD | Weekly Consumer Confidence Index (JAN 17) | 113.2 | - | 114.1 |
| 02:00 | CNY | Industrial Production YTD (YoY) (DEC) | 6.1% | 6.1% | 6.1% |
| 02:00 | CNY | Industrial Production (YoY) (DEC) | 5.9% | 6.0% | 6.2% |
| 02:00 | CNY | Retail Sales (YoY) (DEC) | 11.1% | 11.3% | 11.2% |
| 02:00 | CNY | Retail Sales YTD (YoY) (DEC) | 10.7% | 10.7% | 10.6% |
| 02:00 | CNY | Fixed Assets Ex Rural YTD (YoY) (DEC) | 10.0% | 10.2% | 10.2% |
| 02:00 | CNY | GDP YTD (YoY) (4Q) | 6.9% | 6.9% | 6.9% |
| 02:00 | CNY | GDP SA QoQ (4Q) | 1.6% | 1.8% | 1.8% |
| 02:00 | CNY | GDP (YoY) (4Q) | 6.8% | 6.9% | 6.9% |
| 06:00 | JPY | Machine Tool Orders (YoY) (DEC F) | -25.7% | - | -25.8% |
| 06:30 | JPY | Tokyo Condominium Sales (YoY) (DEC) | -34.1% | - | 4.8% |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 07:00 | EUR | German CPI (MoM) (DEC F) | -0.1% | -0.1% | Medium |
| 07:00 | EUR | German CPI (YoY) (DEC F) | 0.3% | 0.3% | Medium |
| 07:00 | EUR | German CPI - EU Harmonized (MoM) (DEC F) | 0.0% | 0.0% | Low |
| 07:00 | EUR | German CPI - EU Harmonized (YoY) (DEC F) | 0.2% | 0.2% | Low |
| 08:15 | CHF | Producer & Import Prices (MoM) (DEC) | -0.2% | 0.4% | Medium |
| 08:15 | CHF | Producer & Import Prices (YoY) (DEC) | -5.4% | -5.5% | Medium |
| 09:00 | EUR | ECB Current Account SA (NOV) | - | 20.4b | Low |
| 09:00 | EUR | ECB Current Account NSA (NOV) | - | 25.9b | Low |
| 09:30 | GBP | CPI (MoM) (DEC) | 0.0% | 0.0% | High |
| 09:30 | GBP | CPI (YoY) (DEC) | 0.2% | 0.1% | High |
| 09:30 | GBP | CPI Core (YoY) (DEC) | 1.2% | 1.2% | High |
| 09:30 | GBP | RPI (MoM) (DEC) | 0.2% | 0.1% | Low |
| 09:30 | GBP | RPI (YoY) (DEC) | 1.1% | 1.1% | Low |
| 09:30 | GBP | RPI Ex Mort Int. Payments (YoY) (DEC) | 1.1% | 1.1% | Low |
| 09:30 | GBP | PPI Input NSA (MoM) (DEC) | -1.7% | -1.6% | Low |
| 09:30 | GBP | PPI Input NSA (YoY) (DEC) | -11.7% | -13.1% | Low |
| 09:30 | GBP | PPI Output NSA (MoM) (DEC) | -0.2% | -0.2% | Medium |
| 09:30 | GBP | PPI Output NSA (YoY) (DEC) | -1.2% | -1.5% | Medium |
| 09:30 | GBP | PPI Output Core NSA (MoM) (DEC) | 0.0% | -0.2% | Low |
| 09:30 | GBP | PPI Output Core NSA (YoY) (DEC) | -0.1% | -0.1% | Low |
| 09:30 | GBP | ONS House Price (YoY) (NOV) | - | 7.0% | Medium |
| 10:00 | EUR | Eurozone Construction Output (MoM) (NOV) | - | 0.5% | Low |
| 10:00 | EUR | Eurozone Construction Output (YoY) (NOV) | - | 1.1% | Low |
| 10:00 | EUR | Eurozone CPI (MoM) (DEC) | 0.0% | -0.1% | Medium |
| 10:00 | EUR | Eurozone CPI (YoY) (DEC F) | 0.2% | 0.2% | Medium |
| 10:00 | EUR | Eurozone CPI Core (YoY) (DEC F) | 0.9% | 0.9% | Medium |
| 10:00 | EUR | German ZEW Survey Current Situation (JAN) | 53.1 | 55.0 | Medium |
| 10:00 | EUR | German ZEW Survey Expectations (JAN) | 8.0 | 16.1 | Medium |
| 10:00 | EUR | Eurozone ZEW Survey Expectations (JAN) | - | 33.9 | Medium |
| 12:00 | GBP | BOE Governor Carney Speaks in London | - | - | Medium |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.0755 | 1.0828 | 1.0860 | 1.0901 | 1.0933 | 1.0974 | 1.1047 |
| GBP/USD | 1.4096 | 1.4182 | 1.4212 | 1.4268 | 1.4298 | 1.4354 | 1.4440 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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