Europe roundup; Sterling eases ahead of UK boris johnson’s speech, Euro hits 1-week peak ob better-than-expected German flash Q4 GDP, investors eye U.S. inflation report – Wednesday, February 14th, 2018
- Eurozone Dec industrial production yy increase to 5.2 % (forecast 4.2 %) vs previous 3.7 % (revised from 3.2 %)
- Eurozone Dec industrial production mm decrease to 0.4 % (forecast 0.2 %) vs previous 1.3 % (revised from 1 %)
- Eurozone Q4 GDP flash estimate qq stays flat at 0.6 % (forecast 0.6 %) vs previous 0.6 %
- Eurozone Q4 GDP flash estimate yy stays flat at 2.7 % (forecast 2.7 %) vs previous 2.7 %
- Italy Q4 GDP prelim yy decrease to 1.6 % (forecast 1.6 %) vs previous 1.7 %
- Italy Q4 GDP prelim qq decrease to 0.3 % (forecast 0.4 %) vs previous 0.4 %
- Germany Q4 GDP flash yy sa increase to 2.9 % (forecast 3 %) vs previous 2.8 %
- Germany Q4 GDP flash yy nsa stays flat at 2.3 % vs previous 2.3 %
- Germany Jan CPI final mm stays flat at -0.7 % (forecast -0.7 %) vs previous -0.7 %
- Germany Jan HICP final mm stays flat at -1 % (forecast -1 %) vs previous -1 %
- Germany Q4 GDP flash qq sa decrease to 0.6 % (forecast 0.6 %) vs previous 0.8 %
- Germany Jan HICP final yy stays flat at 1.4 % (forecast 1.4 %) vs previous 1.4 %
- Germany Jan CPI final yy stays flat at 1.6 % (forecast 1.6 %) vs previous 1.6 %
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Commerce Department is expected to report that retail sales edged up 0.2 percent in January after advancing 0.4 percent in December. While excluding autos, retail sales are likely to have gained 0.4 percent, after posting similar gains in the previous month.
- (0830 ET/1330 GMT) The U.S. consumer price index likely increased 0.3 percent in January after rising 0.1 percent in December, while in the 12 months through January, the CPI is expected to have risen 1.7 percent. Excluding food and energy, the core CPI probably rose 0.2 percent, matching the gain in the previous month.
- (1000 ET/1500 GMT) The U.S. Commerce Department is expected to report that business inventories rose 0.3 percent in December, after rising 0.4 percent in November.
- (1100 ET/1600 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending February 9.
- (1850 ET/2350 GMT) Japan’s machinery orders are likely to have decreased 2.3 percent for the month of December after posting a rise of 5.7 percent in November.
Key Events Ahead
- No Significant Events Scheduled
DXY: The dollar index declined to a 1-week low as investors anxiously awaited the U.S. inflation data for clues on the pace of interest rate hikes. The greenback against a basket of currencies traded 0.1 percent down at 89.70, having touched a high of 90.57 on Thursday, its highest since Jan. 23. FxWirePro’s Hourly Dollar Strength Index stood at 10.97 (Neutral) by 1000 GMT.
EUR/USD: The euro rose to a 1-week high after data showed strong exports helped the German economy to continue its solid upswing at the end of 2017 and grow by 0.6 percent on the quarter from October through December. The European currency traded 0.1 percent up at 1.2360, having touched a high of 1.2392 earlier, its highest since Jan. 7. FxWirePro’s Hourly Euro Strength Index stood at 20.33 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2402 (38.2% retracement of 1.2522 and 1.2205), a break above targets 1.2475. On the downside, support is seen at 1.2314 (Feb 6 Low), a break below could drag it lower 1.2245 (Feb 7 Low).
USD/JPY: The dollar hit a 15-month low against the Japanese yen, as investors remained nervous ahead of key U.S. inflation numbers due later amid a fragile recovery in global equity markets. The major was trading 0.4 percent down at 107.40, having hit a low of 106.84 earlier, its lowest since Nov. 2016. FxWirePro’s Hourly Yen Strength Index stood at 116.66 (Highly Bullish) by 1000 GMT. Immediate resistance is located at 107.63 (78.6% retracement of 110.48 and 106.84), a break above targets 108.23 (61.8% retracement). On the downside, support is seen at 106.60, a break below could take it lower 106.30.
GBP/USD: Sterling eased below the 1.3900 handle and hit a five-week low against the euro, as investors turned cautious ahead of a speech on Brexit by Britain’s foreign minister Boris Johnson, who is also a prominent supporter of the campaign to leave the European Union. The major traded 0.2 percent down at 1.3870, having hit a low of 1.3764 on Friday, it’s lowest since Jan 17. FxWirePro’s Hourly Sterling Strength Index stood at -125.52 (Slightly Bearish) by 1000 GMT. Immediate resistance is located at 1.3991 (21-DMA), a break above could take it near 1.4063. On the downside, support is seen at 1.3764 (Feb 9 Low), a break below targets 1.3700. Against the euro, the pound was trading 0.2 percent down at 89.05 pence, having hit a low of 89.19 pence, it’s lowest since Jan. 12.
USD/CHF: The Swiss franc surged to a 1-week peak as investors awaited the key U.S. inflation figures for clues on the pace of future U.S. interest rate hikes. The major trades 0.2 percent down at 0.9334, having touched a high of 0.9469 on Thursday, it’s highest since Jan. 24. FxWirePro’s Hourly Swiss Franc Strength Index stood at -93.36 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9432 (21-DMA) and any break above will take the pair to next level till 0.9500. The near-term support is around 0.9287 and any close below that level will drag it till 0.9256.
European shares rose in early deals, boosted by strong results and German economic data, while the greenback slumped to a 1-week low ahead of a U.S. inflation report that could provide clues on the U.S. interest rate outlook.
The pan-European STOXX 600 index rallied 0.7 percent to 373.31 points, while the FTSEurofirst 300 index surged 0.6 percent to 1,462.24 points.
Britain’s FTSE 100 trades 0.6 percent higher at 7,206.98 points, while mid-cap FTSE 250 gained 0.7 percent to 19,448.08 points.
Germany’s DAX rose 0.7 percent at 12,278.04 points; France’s CAC 40 trades 0.7 percent up at 5,142.57 points.
Crude oil prices declined, extending losses for the fifth consecutive session, weighed down by lingering oversupply including rising U.S. inventories and ample physical flows. International benchmark Brent crude was trading 0.1 percent down at $62.45 per barrel by 1038 GMT, having hit a low of $61.75 on Friday, its lowest since Dec. 7. U.S. West Texas Intermediate was trading 0.3 percent down at $58.79 a barrel, after falling as low as $58.06 on Friday, its weakest since Dec. 22.
Gold prices rose for a third straight session to hit a one-week high, boosted by a weaker dollar, while investors awaited U.S. inflation data for clues on the pace of future U.S. interest rate increases. Spot gold was up 0.2 percent at $1,331.32 an ounce by 1039 GMT, after touching its highest level since Feb. 6 at $1,336.82. U.S. gold futures rose 0.3 percent to $1,334.7 per ounce.
The U.S. Treasuries remained narrowly mixed ahead of the country’s consumer price inflation and retail sales data for the month of January, scheduled to be released today by 13:30GMT respectively. The yield on the benchmark 10-year Treasuries hovered around 2.83 percent, the super-long 30-year bond yields skid 1 basis point to 3.11 percent and the yield on the short-term 2-year traded tad higher at 2.11 percent.
The UK gilts climbed as investors await the country’s retail sales for the month of January, scheduled to be released by end of this week. The yield on the benchmark 10-year gilts, slipped 1-1/2 basis points to 1.60 percent, the super-long 30-year bond yields fell 1 basis point to 1.98 percent while the yield on the short-term 2-year slumped 2 basis points to 0.68 percent.
The German bunds rallied after the country’s fourth-quarter gross domestic product (GDP) declined compared to the previous quarter, while the consumer price inflation for the month of January remained unchanged from that in December. The German 10-year bond yields, which move inversely to its price, slumped 1-1/2 basis points to 0.73 percent, the yield on 30-year note also fell nearly 1-1/2 basis points to 1.37 percent and the yield on short-term 2-year traded flat at -0.57 percent.
The New Zealand government bonds surged at the time of closing, tracking overnight movement in the U.S. counterpart ahead of the latter’s consumer price inflation data (CPI) for the month of January, scheduled to be released later today. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 3-1/2 basis points to 2.96 percent, the yield on 20-year plunged 4 basis points to 3.47 percent and the yield on short-term 2-year closed 1/2 basis point lower at 1.87 percent.
The Japanese government bonds gained, following weakness in the country’s fourth-quarter gross domestic product (GDP), with the 10-year yield hitting over a month’s low. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1/2 basis point to 0.06 percent, the yield on the long-term 30-year note fell 1 basis point to 0.79 percent and the yield on short-term 2-year remained tad lower at -0.15 percent.
The Australian bonds jumped during early Asian session, tracking similar movement in the U.S. Treasuries ahead of the employment report for the month of January, scheduled to be released on February 15. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 2-1/2 basis points to 2.83 percent, the yield on the long-term 30-year note plunged 3 basis points to 3.47 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points lower at 1.99 percent.
Source: FXWire Media Round Ups