Forex news and forecasts from 17-01-2020

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17.01.2020
20:00
DJIA +0.05% 29,312.46 +14.82 Nasdaq +0.07% 9,363.45 +6.32 S&P +0.20% 3,323.31 +6.50
19:49
Key events for next week: interest rate decision of the Bank of Japan, Bank of Canada and the ECB, unemployment rate in the UK and Australia, consumer price index of Canada and New Zealand, PMI for the eurozone, UK and the US

On Monday, at 04:30 GMT Japan will report a change in industrial production for November. At 07:00 GMT Germany will release producer price index for December. At 11:00 GMT, in Germany, the Bundesbank monthly report will be released

On Tuesday, at 03:00 GMT the Bank of Japan's interest rate decision will be announced, and at 06:30 GMT, the Bank of Japan will hold a press conference. At 09:30 GMT UK will report a change of claimant count for December, as well as unemployment rate and average earnings for November. At 10:00 GMT Germany and the eurozone will present the ZEW Institute's business sentiment index for January. At 13:30 GMT Canada will announce a change of manufacturing Shipments for November. At 23:30 GMT Australia will release the Westpac Consumer Confidence Index for January.

On Wednesday, at 09:30 GMT, UK will report a change in net public sector borrowing and the number of approved mortgage applications for December. At 11:00 GMT, UK will announce a change in the balance of industrial orders (according to the Confederation of British Industrialists) for January. At 13:30 GMT Canada will publish the consumer price index and the housing price index for December, as well as announce a change in wholesale sales for November. At 14:00 GMT in the United States will be released a house price index for November. At 15:00 GMT in Canada, the Bank of Canada interest rate decision will be announced. In addition, at 15:00 GMT the United States will report a change of existing home sales for December. At 16:15 GMT the Bank of Canada will hold a press conference. At 21:45 GMT New Zealand will announce a change of visitor arrivals for November. At 23:50 GMT, Japan will report a change in the balance of foreign trade for December.

On Thursday, at 00:00 GMT, Australia will announce a change in expectations for consumer price inflation from MI in January, and at 00:30 GMT - a change in unemployment rate and the number of employees for December. At 04:30 GMT Japan will present all industry activity index for November. At 12:45 GMT, in the eurozone, the ECB's interest rate decision will be announced. At 13:30 GMT the ECB will hold a press conference. Also at 13:30 GMT the United States will announce a change of initial jobless claims. At 15:00 GMT in the US will be released a leading Indicators for December. Also at this time, the eurozone will present a consumer confidence index for January. At 16:00 GMT the United States will report a change of crude oil inventories. At 21:45 GMT, New Zealand will publish the consumer price index for the 4th quarter. At 23:30 GMT Japan will release the national consumer price index for December.

On Friday. Initially, the focus will be on the manufacturing PMI's and services PMI's for January: at 00:30 GMT, Japan will release data, at 08:15 GMT - France, at 08:30 GMT-Germany, at 09:00 GMT-the Eurozone, and at 09:30 GMT - the United Kingdom. At 13:30 GMT Canada will announce a change in retail sales for November. At 14:00 GMT Belgium will publish an index of business sentiment for January. At 14:45 GMT, the United States will release manufacturing PMI and services PMI for January. At 18:00 GMT, in the US, Baker Hughes will release an oil rig count report.

18:01
U.S.: Baker Hughes Oil Rig Count, January 673
17:00
European stocks closed: FTSE 100 7,674.56 +64.75 +0.85% DAX 13,526.13 +96.70 +0.72% CAC 40 6,100.72 +61.69 +1.02%
15:39
Philadelphia Fed President Harker: U.S. economy looking "pretty good"
  • Says he expects inflation to reach Fed's 2% target this year
  • Data show labor market doing incredibly well
  • See U.S. growth returning to trend of about 2% this year
  • Business investment is a laggard
  • Hopes resolving some trade and global uncertainty to unleash business investment
  • Argues negative rates would be disruptive in U.S
  • Says Fed interventions in repo market are temporary
  • Whether Fed offers a standing repo facility is a debatable point
  • Says he doesn't want Fed to be the first choice for liquidity, but a backstop
15:28
U.S. consumer sentiment index unexpectedly edges down in early January

A report from the University of Michigan revealed on Friday the preliminary reading for the Reuters/Michigan index of consumer sentiment fell to 99.1 in early January 2020.

Economists had expected the index would stay at a seven-month high of 99.3, which was recorded in December 2019.

According to the report, the index of current U.S. economic conditions rose slightly to 115.8 in January, while the index of consumer expectations inched down to 88.3.

15:11
U.S. job openings decrease in November

The Job Openings and Labor Turnover Survey (JOLTS) published by the Labor Department on Friday revealed a 7.6 percent m-o-m decline in the U.S. job openings in November after a 3.5 percent m-o-m drop in October.

According to the report, employers posted 6.800 million job openings in November, compared to the October figure of 7.361 million (revised from 7.267 million in original estimate) and economists' expectations of 7.233 million. The job openings rate was 4.3 percent in November, down from an unrevised 4.6 percent in the prior month. The report showed that the largest drops in job openings were in retail trade (-139,000 jobs) and construction (-112,000). The job openings level decreased for total private (-520,000) and edged down for government (-42,000).

Meanwhile, the number of hires rose by 0.7 percent m-o-m to 5.821 million in November from 5.782 in October. The hiring rate remained unchanged m-o-m at 3.8 percent. The hires level was little changed in all industries and regions.

The separation rate in November was 5.648 million or 3.7 percent, compared to 5.652 million or 3.7 percent in October. Within separations, the quits rate was 2.3 percent (flat m-o-m), and the layoffs rate was 1.1 percent (-0.1 pp m-o-m).

15:00
U.S.: JOLTs Job Openings, November 6.8 (forecast 7.233)
14:55
BoC to be cautiously optimistic next week – TDS

FXStreet reports that analysts at TD Securities are expecting the Bank’s tone next week to be cautiously optimistic next week and they will acknowledge softer household spending but are likely to argue that population growth and wages will support solid spending growth going forward, while easing trade tensions will support business investment and exports.

“The Bank will also incorporate new fiscal measures in their forecast this quarter — and while details of coming policy measures have been sparse, recently announced tax measures should also provide a lift to household spending forecasts. The Bank will still have to lower its forecast for 2019Q4, but it will remain above our tracking of 0.5% — and to a significant extent to the negative revisions will be offset by quicker growth in 2020Q1.”

“We expect the Bank’s forecast for growth in 2020 and 2021 to be unchanged at 1.7% and 1.8% respectively, with an upside risk to the 2021 growth forecast. Similarly, forecasts for global growth should be stable to slightly higher, which will give the communique a hawkish tinge.”

“Look for the Bank to continue to describe the economy as operating close to capacity, with CPI and core CPI inflation expected to remain near target.”

14:47
U.S. industrial output decreases more than forecast in December

The Federal Reserve reported on Friday the U.S. industrial production fell 0.3 m-o-m in December, following a revised 0.8 percent m-o-m surge in November (originally a 1.1 percent m-o-m advance).

Economists had forecast industrial production would decrease by 0.2 percent m-o-m in December.

According to the report, the December drop was due to a 5.6 percent m-o-m tumble in output of utilities, which was attributable to a large decrease in demand for heating due to unseasonably warm weather in December. However, this drop was partially offset by a 0.2 percent m-o-m gain in manufacturing output and 1.3 percent m-o-m jump in mining production.

Capacity utilization for the industrial sector decreased 0.4 percentage point m-o-m in December to 77.0 percent. That was 0.1 percentage point below economists' forecast and 2.8 percentage points below its long-run (1972-2018) average.

In y-o-y terms, the industrial output dropped 1.0 percent in December, following a revised 0.7 percent fall in the prior month (originally a 0.8 percent decline).

14:34
U.S. Stocks open: Dow +0.10%, Nasdaq +0.25%, S&P +0.15%
14:29
Before the bell: S&P futures +0.27%, NASDAQ futures +0.45%

U.S. stock-index futures rose on Friday, as investors digested the Chinese economic data, which signaled that the pressure on the world's second-biggest economy may be starting to diminish.


Global Stocks:

Index/commodity

Last

Today's Change, points

Today's Change, %

Nikkei

24,041.26

+108.13

+0.45%

Hang Seng

29,056.42

+173.38

+0.60%

Shanghai

3,075.50

+1.41

+0.05%

S&P/ASX

7,064.10

+22.30

+0.32%

FTSE

7,684.60

+74.79

+0.98%

CAC

6,101.23

+62.20

+1.03%

DAX

13,527.52

+98.09

+0.73%

Crude oil

$58.78


+0.44%

Gold

$1,555.30


+0.34%

14:15
U.S.: Industrial Production YoY , December -1%
14:15
U.S.: Capacity Utilization, December 77% (forecast 77.1%)
14:15
U.S.: Industrial Production (MoM), December -0.3% (forecast -0.2%)
14:04
ECB Preview: Time to reveal the scope – Danske Bank

FXStreet reports that in view of analysts at Danske Bank, the ECB meeting next week is set to focus on the strategic review and not on new policy messages.

“Media reported that ECB governing council members received documents concerning the strategic review, which will officially be launched next week.”

“We expect the ECB to confirm its easing bias and acknowledge its downside risk assessment, but also note the fading downside risks. We do not expect big market movements on the meeting.”

13:55
Wall Street. Stocks before the bell

(company / ticker / price / change ($/%) / volume)


ALCOA INC.

AA

18.02

0.24(1.35%)

149217

ALTRIA GROUP INC.

MO

50.91

-0.18(-0.35%)

5952

Amazon.com Inc., NASDAQ

AMZN

1,883.06

5.12(0.27%)

19547

Apple Inc.

AAPL

316.9

1.66(0.53%)

361193

AT&T Inc

T

38.16

0.13(0.34%)

21352

Boeing Co

BA

332.8

0.80(0.24%)

21182

Caterpillar Inc

CAT

147.73

0.89(0.61%)

7520

Chevron Corp

CVX

117.2

0.31(0.27%)

5625

Cisco Systems Inc

CSCO

49.35

0.30(0.61%)

14076

Citigroup Inc., NYSE

C

81.5

0.50(0.62%)

12137

E. I. du Pont de Nemours and Co

DD

62

0.30(0.49%)

1711

Exxon Mobil Corp

XOM

69.02

0.20(0.29%)

12975

Facebook, Inc.

FB

222.48

0.71(0.32%)

77197

FedEx Corporation, NYSE

FDX

159.5

-0.04(-0.03%)

3231

Ford Motor Co.

F

9.21

0.04(0.44%)

90102

Freeport-McMoRan Copper & Gold Inc., NYSE

FCX

12.97

0.12(0.93%)

35431

General Electric Co

GE

11.88

0.04(0.34%)

58712

Goldman Sachs

GS

250.5

0.78(0.31%)

2796

Google Inc.

GOOG

1,463.00

11.30(0.78%)

9757

Hewlett-Packard Co.

HPQ

21.7

0.03(0.14%)

591

Home Depot Inc

HD

229.9

1.08(0.47%)

6599

Intel Corp

INTC

59.95

0.29(0.49%)

26922

International Business Machines Co...

IBM

136.3

-1.68(-1.22%)

37189

Johnson & Johnson

JNJ

148.6

0.40(0.27%)

1081

JPMorgan Chase and Co

JPM

138

0.75(0.55%)

14281

McDonald's Corp

MCD

211.35

0.50(0.24%)

2317

Merck & Co Inc

MRK

91.5

0.32(0.35%)

3642

Microsoft Corp

MSFT

167.45

1.28(0.77%)

156615

Nike

NKE

103.71

0.34(0.33%)

8350

Pfizer Inc

PFE

40.7

0.09(0.22%)

2896

Procter & Gamble Co

PG

126.19

0.12(0.10%)

801

Starbucks Corporation, NASDAQ

SBUX

92.9

0.32(0.35%)

5888

Tesla Motors, Inc., NASDAQ

TSLA

507.18

-6.31(-1.23%)

363483

The Coca-Cola Co

KO

56.98

0.16(0.28%)

6434

Twitter, Inc., NYSE

TWTR

33.85

-0.34(-0.99%)

175570

UnitedHealth Group Inc

UNH

301.02

0.28(0.09%)

993

Verizon Communications Inc

VZ

59.88

0.21(0.35%)

7436

Visa

V

201.95

1.00(0.50%)

20292

Wal-Mart Stores Inc

WMT

116.25

0.35(0.30%)

6001

Walt Disney Co

DIS

145.75

0.63(0.43%)

30731

Yandex N.V., NASDAQ

YNDX

44.63

0.50(1.13%)

69500

13:52
Target price changes before the market open

Apple (AAPL) target raised to 368 from $296 at Morgan Stanley

Apple (AAPL) target raised to $280 from $225 at Nomura

13:52
Downgrades before the market open

Morgan Stanley (MS) downgraded to Neutral from Overweight at Piper Sandler; target raised to $59

Twitter (TWTR) downgraded to Neutral from Buy at UBS; target lowered to $35

13:51
Upgrades before the market open

Alcoa (AA) upgraded to Buy from Hold at Deutsche Bank; target lowered to $20.50

Snap (SNAP) upgraded to Buy from Neutral at UBS; target raised to $24

13:44
U.S. housing starts surge 16.9 percent in December

The Commerce Department reported on Friday the housing starts climbed by 16.9 percent m-o-m in December to a seasonally adjusted annual pace of 1.608 million (the highest level since December 2006), while building permits fell by 3.9 percent m-o-m to an annual rate of 1.416 million.

Economists had forecast housing starts increasing to a pace of 1.375 million units last month and building permits falling to a pace of 1.468 million units.

Data for November was revised to show homebuilding growing to a pace of 1.375 million units, instead of increasing at a rate of 1.365 million units as previously reported.

According to the report, permits for single-family homes, the largest segment of the market, decreased 0.5 percent m-o-m to a rate of 916,000 units in December, while approvals for the multi-family homes segment dropped 9.6 percent m-o-m to a 500,000 unit-rate.

In the meantime, groundbreaking on single-family homes jumped 11.2 percent m-o-m to a rate of 1.055 million units in December (the highest level since June 2007), while housing starts for the multi-family climbed 29.8 percent m-o-m to a 553,000 -unit pace.

13:30
Canada: Foreign Securities Purchases, November -1.75
13:30
U.S.: Building Permits, December 1.416 (forecast 1.468)
13:30
U.S.: Housing Starts, December 1.608 (forecast 1.375)
13:18
China: Positive economic releases – TDS

FXStreet reports that analysts at TD Securities note that China released a positive slate of December data including above consensus readings in industrial production 6.9% YoY (market 5.9%, TD 6.1%), retail sales 8.0% YoY (market 7.9%, TD 8.0%) and fixed assets 5.4% YoY (market 5.2%).

“GDP was in line with expectations at 6.0% y/y, with 6.1% growth registered for the full year. The data continues the run of positive data surprises in China including in trade and credit metrics.”

“We expect a further pick up in activity, albeit a gradual one, with authorities unwilling to significantly expand both monetary and fiscal stimulus. The Phase 1 trade deal is likely only to provide marginal support to growth given most tariffs remain in place.”

12:58
European session review: GBP falls as disappointing UK's retail sales data boost expectations of BoE rate cut
Time Country Event Period Previous value Forecast Actual
09:30 United Kingdom Retail Sales (MoM) December -0.8% 0.5% -0.6%
09:30 United Kingdom Retail Sales (YoY) December 0.8% 2.6% 0.9%
10:00 Eurozone Construction Output, y/y November 0.9% 1.9% 1.4%
10:00 Eurozone Harmonized CPI December -0.3% 0.3% 0.3%
10:00 Eurozone Harmonized CPI ex EFAT, Y/Y December 1.3% 1.3% 1.3%
10:00 Eurozone Harmonized CPI, Y/Y December 1% 1.3% 1.3%

GBP fell against its major counterparts, weighted down by worse-than-forecast retail sales data for December. The Office for National Statistics (ONS) reported U.K. retail sales declined 0.6% m/m in December, following a 0.8% m/m drop in November. This marked the fifth straight month of no growth. Economists had forecast a monthly gain of 0.5% m/m. The disappointing retail sales data boosted hopes that the Bank of England (BoE) may cut interest rates as soon as this month.

EUR was little changed against its major rivals after the release of the Eurozone's final inflation data. Eurostat reported that Eurozone's inflation increased to 1.3% y/y in December, as initially estimated, from 1% y/y in November. That was in line with economists' forecast.

USD held its ground against its rivals, helped by recent upbeat U.S. economic statistics. The index, measuring the value of the U.S. dollar relative to a basket of six major currencies, (DXY) rose 0.15% to 97.46. The U.S. Commerce Department reported on Thursday that retail sales rose 0.3% in December, as expected. The data for November was revised up to +0.3% from +0.2%. Meanwhile, the Federal Reserve Bank (FRB) of Philadelphia said that manufacturing activity index in the mid-Atlantic region rebounded in January to its highest level in eight months, while prospects are most bright for the last year and a half. Other data showed that the number of initial jobless claims fell more than expected last week, indicating that the U.S.labor market remained strong.

AUD rose on Friday as the Chinese economic data overnight signaled that the pressure on the world's second-biggest economy may be starting to diminish. This pushed the offshore yuan (CNH) to a six-month high against the U.S. dollar as well. The data released by the National Bureau of Statistics (NBS) showed that China's gross domestic product (GBP) grew 6.0% y/y in the fourth quarter, the same rate as seen in the third quarter and in line with expectations. Meanwhile, the country's industrial output accelerated unexpectedly to 6.9% in December from 6.2% in November. The rate was forecast to ease to 5.9%. Elsewhere, China's retail sales growth stabilized at 8% in December. Experts expected growth to slow to 7.8%. The Australian currency is often traded as a liquid proxy for the Chinese currency as its economy is heavily reliant on exports to China.

12:20
Downside pressure in AUD/USD looks mitigated – UOB

FXStreet reports that in light of the recent price action in AUD/USD, the selling pressure appears to have lost some traction, in opinion of FX Strategists at UOB Group.

24-hour view: “AUD retreated quickly after briefly touching a high of 0.6933. A temporary top could be in place and from here, barring a move back above 0.6933, AUD could edge lower towards 0.6875. In view of the lackluster momentum, the next support at 0.6850 is likely ‘safe’ for today. On the upside, 0.6915 is a minor resistance ahead of 0.6933.”

Next 1-3 weeks: “AUD popped briefly to a high of 0.6934 yesterday (06 Jan) before retreating to end the day slightly lower at 0.6896 (-0.14%). While our ‘strong resistance’ level at 0.6950 is still intact, downward pressure has eased considerably. In other words, it appears increasingly likely that the pull-back from the late December’s peak of 0.7032 has found a short-term bottom at 0.6849 (low last Wednesday, 08 Jan). Meanwhile, a break of 0.6850 is not ruled out just yet.”

11:58
U.S. to shift focus to the EU post phase one deal – Rabobank

FXStreet reports that Rabobank's analysts point out that European trade commissioner Phil Hogan has concluded his visit to the US and in his words, his visit has laid the groundwork for improving transatlantic cooperation.

“The joint proposal to reform the WTO has been the major achievement, but much more work needs to be done, especially on trade-related issues.”

“Now that the phase one deal between the US and China has been signed, the US will shift focus to the EU.”

“Frustrations have been increasing on both sides of the Atlantic. The EU has made little progress on US requests related to defense spending, China policy and trade policy.”

11:39
China: Cyclical recovery setting in – Standard Chartered

China: Cyclical recovery setting in – Standard Chartered

FXStreet reports that analysts at Standard Chartered notes that China’s economy expanded 6.0% YoY and 1.5% QoQ (seasonally adjusted) in Q4, ending a downtrend since H2-2018.

“For the full year, China grew 6.1%, compared with 6.6% in 2018. Monthly data suggests that growth in China continued to recover in December, with industrial production (IP) growth jumping unexpectedly to 6.9% y/y, against market expectations of only 5.9%. Fixed asset investment (FAI) growth also improved to 7.4% y/y in December from 5.2% y/y in November. Annual GDP deflator was 1.6%, reflecting PPI deflation and rising CPI inflation.”

“China is likely to maintain a pro-growth policy stance through H1-2020. But weak spots in the economy remain. The industrial sector, for example, continues to face difficulty from falling factory prices and deteriorating profitability. Manufacturing investment remained sluggish for most of 2019. Real-estate construction investment saw a strong rally in 2019, but the trend is likely to reverse in 2020 on declining land sales since H2-2018. Premier Li has reiterated the importance of China kick-starting the year on a strong note, in order to meet the stated goal of doubling real GDP from 2010-20 by year-end.”

“We maintain our expectation for the People’s Bank of China (PBoC) to lower the medium-term lending facility (MLF) rate by a total 20bps in H1, and cut the reserve requirement ratio (RRR) by another 100bps (or inject an equivalent amount of liquidity through targeted RRR cuts or central bank lending facilities) before end-Q3. The next MLF rate cut (5bps) may come in February. We also maintain our GDP growth forecast for 2020 at 6.1%, above market consensus of 5.9%.”

11:23
China's Premier Li: We will continue to cut taxes on a large scale in 2020 - State Media

  • Says China has confidence and ability to cope with risks and challenges, keep economic operation within a reasonable range
  • We will continue to open up in education, technology, and other sectors

11:21
U.S.: Industrial production to retreat again in December – TDS

FXStreet reports that analysts at TD Securities suggest that following a 1.1% MoM rebound, they are looking for the US industrial production to retreat again, posting a -0.5% decline for Dec.

“We expect weakness in utilities, to a larger extent, and manufacturing to drive production lower during the month.”

“We also forecast a small decline in housing starts to 1,360k in Dec (from 1,380k), while we look for UMich's consumer sentiment index to improve to 100.5 for Jan's preliminary release (from 99.3).”

10:58
Australia: Q4 CPI likely to print 0.7% – ANZ

FXStreet reports that analysts at ANZ are forecasting the Australia's headline inflation is likely to print 0.7% QoQ in Q4, with the annual rate rising to 1.9%.

"The largest contributor to the headline figure is from the alcohol and tobacco segment. Petrol prices are also expected to add considerably to inflation this quarter, in contrast to the last. These two components add almost 0.6ppt to the headline number."

"Trimmed mean inflation, the underlying measure of inflation focused on by the RBA, is expected to come in at 0.4% q/q again this quarter. This would see the annual rate stay at 1.6%. We see the risks to trimmed mean for the quarter as balanced."

"Our forecast for trimmed mean inflation is in line with what the RBA published in the November SoMP. Although inflation is certainly important to the RBA, we think at this stage what happens with the labour market data on 23 January is key to whether the RBA cuts in February."

10:44
ECB likely to leave rates unchanged – Nordea

FXStreet reports that according to analysts at Nordea Markets, ECB will leave rates unchanged at Lagarde's second policy meeting and focus will be on the strategic review.

"We change our forecast and no longer expect further easing! Risks are tilted towards slightly higher rates as an immediate market response."

"We expect the key ECB interest rates to be kept unchanged at next week's meeting at -50bp and 0bp for the deposit rate and the main refinancing rate, respectively, which is in line with consensus and market pricing."

"Will Lagarde's ECB be less dovish than Draghi's ECB? A month ago, we would probably have said "no". Now, it's a soft "yes, probably". Consequently, we change our forecast and no longer expect additional policy easing!"

"From a strategic point of view, we still see risks skewed to the dovish side. Markets have largely given up pricing further easing over the coming year, and currently price in a clear risk of a rate hike next year, which seems premature. It will not take much weaker numbers for the markets to resume speculation about additional easing. After all, the ECB's forward guidance retains an explicit easing bias, which is unlikely to be removed at this point."

10:30
Fitch has improved its forecast for the global economy for 2020

The international rating agency Fitch has revised upward the forecast for global economic growth for 2020.

This decision was influenced by the recent signing by the United States and China of an agreement in the first phase of a trade dispute settlement.

Now, Fitch analysts expect the global economy to add 2.6% this year, as it did a year earlier. The agency's previous forecast suggested that global GDP would grow by 2.5% this year.

However, experts warn that "the consequences of the transaction for the global economy will depend on how its conditions are met."

10:16
Eurozone сonsumer price growth accelerated to 1.3% in December

Figures published by Eurostat showed that the euro area annual inflation rate was 1.3% in December 2019, up from 1.0% in November. A year earlier, the rate was 1.5%.

European Union annual inflation was 1.6% in December 2019, up from 1.3% in November. A year earlier, the rate was 1.6%.

The lowest annual rates were registered in Portugal (0.4%), Italy (0.5%) and Cyprus (0.7%). The highest annual rates were recorded in Hungary (4.1%), Romania (4.0%), Czechia and Slovakia (both 3.2%). Compared with November, annual inflation fell in two Member States, remained stable in three and rose in twenty-three.

In December, the highest contribution to the annual euro area inflation rate came from services (+0.80 percentage points, pp), followed by food, alcohol & tobacco (+0.38 pp), non-energy industrial goods (+0.12 pp) and energy (+0.02 pp).

10:01
Eurozone: Construction Output, y/y, November 1.4% (forecast 1.9%)
10:00
Eurozone: Harmonized CPI ex EFAT, Y/Y, December 1.3% (forecast 1.3%)
10:00
Eurozone: Harmonized CPI, Y/Y, December 1.3% (forecast 1.3%)
10:00
Eurozone: Harmonized CPI, December 0.3% (forecast 0.3%)
09:47
UK retail sales unexpectedly declined in December

Office for National Statistics said, in the three months to December 2019, the quantity bought in retail sales decreased by 1.0% when compared with the previous three months. All sectors except household goods stores and fuel saw a decline in the quantity bought for the three-month on three-month movement; driven mainly by non-food stores at negative 1.0%.

The quantity bought in December 2019 fell by 0.6% when compared with the previous month; the fifth consecutive month of no growth. Economists had expected a 0.5% increase. The quantity bought in food stores fell by 1.3% for the monthly growth rate, which was the largest fall since December 2016, also at 1.3%. Online sales as a proportion of all retailing was 19.0% in December 2019, compared with the 18.6% reported in November 2019.

In annual terms, retail sales increased by 0.9% compared to a 0.8% increase in November. Economists had expected a 2.6% increase.

Comparing the three months to December 2019 against the same three months a year ago, growth in the quantity bought increased by 1.6% in December 2019, despite a strong decline of 2.2% for department stores.


After data release GBP/USD fell sharply, setting a new session low.

09:30
United Kingdom: Retail Sales (YoY) , December 0.9% (forecast 2.6%)
09:30
United Kingdom: Retail Sales (MoM), December -0.6% (forecast 0.5%)
09:19
Eurozone current account surplus fell in November

According to the report from European Central Bank, the current account of the euro area recorded a surplus of €34 billion in November 2019, decreasing by €2 billion from the previous month. Surpluses were recorded for goods (€26 billion), services (€10 billion) and primary income (€7 billion). A deficit was recorded for secondary income (€10 billion).

In the 12 months to November 2019, the current account recorded a surplus of €357 billion (3.0% of euro area GDP), compared with a surplus of €367 billion (3.2% of euro area GDP) in the 12 months to November 2018. This decline was mainly driven by a reduction in the surpluses for services (down from €117 billion to €94 billion) and primary income (down from €91 billion to €87 billion), but also by a widening of the secondary income deficit (up from €146 billion to €157 billion). These developments were only partly offset by a larger surplus for goods (up from €304 billion to €334 billion).

In the financial account, euro area residents made net acquisitions of foreign portfolio investment securities totalling €333 billion in the 12-month period to November 2019 (up from €223 billion in the 12 months to November 2018). Over the same period, non-residents made net acquisitions of euro area portfolio investment securities amounting to €274 billion (up from €130 billion).

09:00
Eurozone: Current account, unadjusted, bln , November 36.6
08:39
Australia: Critical employment report ahead – ANZ

FXStreet reports that ANZ analysts suggest that in their view, the December employment report of Australian economy could be the key to whether the RBA cuts in February.

"A gain of 10k or less for the month would confirm a sharp slowing in employment growth since Q2 and Q3 last year. While employment is a lagging indicator, a sharp slowdown will cast doubt on the sustainability of the economy's modest revival."

"Following the strong retail sales report for November, which was published on 10 January, the market reduced its view of the probability of an RBA rate cut in February to around 40%. It has since crept back up to around 50%, in part due to speculation that November sales were exaggerated by the growth of Black Friday retail activity. ANZ card data suggest that this may indeed be the case. November strength does not appear to have continued, and in fact Christmas retail sales look to have been very weak."

"The Q4 2019 CPI report due at the end of January will, as always, provide key information for the RBA ahead of its February meeting; but only a major surprise would upset the RBA's outlook. We expect headline inflation for the quarter to jump to 0.7% q/q and 1.9% y/y. Trimmed mean inflation is expected to be more restrained at 0.4%and 1.6% in quarterly and annual terms, respectively."

08:20
China's real per capita income grew by 8.9% in 2019

Real per capita income in China in 2019 exceeded 30,730 yuan (about 4,470 dollars), according to published data from the state statistical Bureau of China.

"In 2019, the real per capita income was 30,733 yuan, the nominal growth compared to the same period in 2018 was 8.9%. Taking into account the price factor, the real growth was 5.8%, " the report says.

Real per capita income in urban areas was 42,359 yuan (6.16 thousand dollars), real growth was 5%, disposable income per capita in rural areas was 16,021 yuan (2.33 thousand dollars), real growth was 6.2%. Thus, the coefficient of disposable income per capita between the city and the village was 2.64, which is 0.05 less than in the same period of 2018.

The national average per capita income was 26,523 yuan (3.85 thousand dollars), which is 9% more than in 2018.

07:59
EUR/USD: Looking for recovery – Commerzbank

FXStreet reports that Karen Jones, analyst at Commerzbank notes that EUR/USD continues to see a slight recovery and the intraday Elliott wave counts are contradictory and they remain unable to rule out scope for a deeper sell off to the 100 day ma and uptrend at 1.1068/64.

"Overhead the market is facing tough resistance at 1.1190-1.1240 - namely the 55 week ma, the 2019-2020 down channel and the recent high. This guards the 200 week ma at 1.1359 which continues to represent a critical break point medium term."

"Failure at the uptrend would target the 1.0981 29th November low."

07:45
Swiss producer and import price index fell less than expected in December

According to the report Federal Statistical Office (FSO), the producer and import price index rose in December 2019 by 0.1% compared with the previous month, reaching 100.7 points (December 2015 = 100). Compared with December 2018, the price level of the whole range of domestic and imported products fell by 1.7%. Economists had expected a 2.5% decrease.

The average annualised inflation rate in 2019 was -1.4%. The decline is primarily due to lower prices for pharmaceutical products, scrap, mineral oil products as well as metals and semi-finished metal products. While domestic producer prices fell 0.8%, import prices fell 2.5%. Average annual inflation had been + 2.4% in 2018 and + 0.9% in 2017. The higher prices for scrap were primarily responsible for the increase in the producer price index compared to the previous month. In the import price index, rising prices were registered compared to November 2019, especially for oil and gas. In contrast, metals and semi-finished metal products became cheaper.

07:30
Switzerland: Producer & Import Prices, y/y, December -1.7% (forecast -2.5%)
07:17
Asian session review: US dollar rose to its highest level since late May in 2019 against the yen
Time Country Event Period Previous value Forecast Actual
02:00 China Industrial Production y/y December 6.2% 5.9% 6.9%
02:00 China Retail Sales y/y December 8% 7.8% 8%
02:00 China Fixed Asset Investment December 5.2% 5.2% 5.4%
02:00 China GDP y/y Quarter IV 6% 6% 6%
04:30 Japan Tertiary Industry Index November -4.6% 3.9% 1.3%

The US dollar reached an eight-month peak against the yen on Friday after upbeat US economic statistics, while the yuan strengthened due to Chinese GDP data that improved market sentiment.

The U.S. Department of Commerce reported on Thursday that retail sales rose 0.3% in December, as expected. The data for November was revised up to +0.3% from +0.2%.

Meanwhile, the Federal reserve Bank of Philadelphia said that manufacturing activity index in the mid-Atlantic region rebounded in January to its highest level in eight months, while prospects are most bright for the last year and a half.

Other data showed that the number of initial jobless claims fell more than expected last week.

Data from the National Bureau of Statistics showed that gross domestic product grew 6.0% y/y in the fourth quarter, the same rate as seen in the third quarter and in line with expectations. Industrial output accelerated unexpectedly to 6.9% in December from 6.2% in November. The rate was expected to ease to 5.9%. Meanwhile, retail sales growth stabilized at 8% in December. Experts expected growth to slow to 7.8%

The Australian dollar, often seen as a proxy bet on the Chinese economy, was little changed. The currency was under pressure amid concerns about forest fires, which increased expectations of a rate cut by the RBA as early as next month.

07:01
China's economy expanded at the slowest pace since 1990 - NBS

China's GDP growth rate in 2019 was 6.1% compared to 6.6% in 2018, which is generally in line with the official forecast, according to data from National Bureau of Statistics.

"According to preliminary data, China's gross domestic product in 2019 amounted to 99.086 trillion yuan (14.4 trillion dollars), which is 6.1% more than last year, and corresponds to the expected forecast of 6-6. 5%. In particular, annual GDP growth in the first quarter was 6.4%, in the second - 6.2%, in the third-6%, in the fourth-6%, " said NBS.

In 2018, the growth rate of the Chinese economy slowed to the lowest since 1990 - 6.6%. Nevertheless, China has maintained its status as the world's second largest economy.

06:45
Options levels on friday, January 17, 2020 EURUSD GBPUSD

EUR/USD

Resistance levels (open interest**, contracts)

$1.1268 (3612)

$1.1233 (3153)

$1.1206 (1808)

Price at time of writing this review: $1.1138

Support levels (open interest**, contracts):

$1.1118 (4533)

$1.1085 (4507)

$1.1044 (2744)


Comments:

- Overall open interest on the CALL options and PUT options with the expiration date February, 7 is 52451 contracts (according to data from January, 16) with the maximum number of contracts with strike price $1,1350 (4689);


GBP/USD

Resistance levels (open interest**, contracts)

$1.3207 (983)

$1.3179 (1443)

$1.3136 (1039)

Price at time of writing this review: $1.3083

Support levels (open interest**, contracts):

$1.3012 (2666)

$1.2985 (1157)

$1.2954 (3208)


Comments:

- Overall open interest on the CALL options with the expiration date February, 7 is 24159 contracts, with the maximum number of contracts with strike price $1,3600 (3945);

- Overall open interest on the PUT options with the expiration date February, 7 is 20945 contracts, with the maximum number of contracts with strike price $1,3000 (3208);

- The ratio of PUT/CALL was 0.87 versus 0.86 from the previous trading day according to data from January, 16

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

04:31
Japan: Tertiary Industry Index , November 1.3% (forecast 3.9%)
02:30
Commodities. Daily history for Thursday, January 16, 2020
Raw materials Closed Change, %
Brent 64.91 0.64
WTI 58.61 0.96
Silver 17.91 -0.33
Gold 1552.312 -0.24
Palladium 2305.82 1.91
02:00
China: GDP y/y, Quarter IV 6% (forecast 6%)
02:00
China: Fixed Asset Investment, December 5.4% (forecast 5.2%)
02:00
China: Retail Sales y/y, December 8% (forecast 7.8%)
02:00
China: Industrial Production y/y, December 6.9% (forecast 5.9%)
00:30
Stocks. Daily history for Thursday, January 16, 2020
Index Change, points Closed Change, %
NIKKEI 225 16.55 23933.13 0.07
Hang Seng 109.45 28883.04 0.38
KOSPI 17.07 2248.05 0.77
ASX 200 47 7041.8 0.67
FTSE 100 -32.99 7609.81 -0.43
DAX -2.87 13429.43 -0.02
CAC 40 6.42 6039.03 0.11
Dow Jones 267.42 29297.64 0.92
S&P 500 27.52 3316.81 0.84
NASDAQ Composite 98.43 9357.13 1.06
00:15
Currencies. Daily history for Thursday, January 16, 2020
Pare Closed Change, %
AUDUSD 0.68958 -0.13
EURJPY 122.67 0.12
EURUSD 1.1135 -0.13
GBPJPY 144.017 0.51
GBPUSD 1.30731 0.27
NZDUSD 0.66325 0.23
USDCAD 1.3043 0.01
USDCHF 0.96501 0.11
USDJPY 110.159 0.24

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