FX News Today

Bullard: four rate hikes may still be about right after the strong US jobs number, though inflation remains uncertain. He said that neither the markets nor the Fed are thinking about a January hike, while more information is needed before making a call on March. He would be more inclined to put weight on inflation if expectations continue to decline, though he still thinks the economy is set to grow 2.5-3.0% this year. Bullard doesn’t think the Fed needs to “re-litigate” China concerns, since the country should still grow around 6%. He does see some pick-up in wages beyond inflation and productivity as an indication that the labor market is tight. He doesn’t believe that oil prices need to stabilize before a second Fed hike, though still-weak oil would weigh on the committee’s deliberations. This has a more hawkish overtone relative to his earlier dovish remarks on oil and inflation risks.

The BoE did the expected and kept monetary policy on hold at the January meeting. The voting pattern, which saw a broad majority of 8 in favour of keeping rates steady, with one dissenter, was also as expected. The statement and especially the minutes show, however, that uncertainty is rising. Growth projections as well as near term inflation projections seem to have been revised down already and the doubts concerning the medium to long term inflation forecasts seem to be on the rise as well. The February Inflation Report is likely to bring more clarity.

Yesterday’s US reports revealed big December trade price drops with yet another round of surprisingly big export price declines, and a 7k (seasonally adjusted) initial claims pop that masked a hefty 99k (not seasonally adjusted) increase. The renewed trade price plunge predictably reflects historic declines in energy prices, sharp gains in the value of the dollar, a global growth slowdown, an inventory overhang that is depressing prices, and a shifting supply-demand dynamic in the global petroleum industry that has wacked the factory sector. The initial claims rise likely reflects the ongoing difficulties of seasonal adjustment, though claims have clearly trended higher since early December to remove some of the upside risk that claims have routinely provided for the job growth outlook. We peg January payroll growth at 200k.

Main Macro Events Today

• US Retail Sales: December retail sales will be released today and should show a 0.1% (median 0.1%) headline increase with the ex-autos component up 0.3% (median 0.3%). This follows November figures of 0.2% for the headline and 0.4% for ex-autos. The report faces divergent forces from firm construction data and chain store sales but the slowdown in auto sales and continued declines in gasoline prices will likely weigh.
• US Michigan Consumer Sentiment: The first release on January Michigan Sentiment is expected to show an increase in the headline to 92.8 (median 93.0) from 92.6 in December’s final release. The already released IBD/TIPP poll for January improved slightly with an uptick to 7.3 from 47.2 in December. Gasoline prices continued to decline in December and the first half of this month which could help lift the headline.

• US Industrial Production: December industrial production is out Friday and should reveal a 0.2% (median -0.3%) decline for the month. This would be the fourth month of consecutive declines, following drops of 0.6% in November, 0.4% in October and 0.1% in September. The December employment report revealed another month of weak data in the mining sector which will likely continue to weigh as oil prices continue to decline. We expect the capacity utilization rate to fall to 76.7% from 77.0% in November.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

German GDP growth accelerated to 1.7% in 2015, from 1.6% in 2014 and in line with expectations. On a working day adjusted basis though, growth slowed to 1.5% from 1.6%, so despite the improvement in the headline number the German economy didn’t quite escape the slowdown in world growth, but both numbers are clear above the long term average of 1.3%. The German statistical office said that growth was relatively broad based across the manufacturing and construction as well as the services sectors. Overall then a solid number, although even in Germany structural issues remain and this year the refugee influx will put a strain on the economy.

ECB lowers Greek ELA ceiling to EUR 72 blnfrom EUR 75.8 bln. The Greek central bank said in a statement that the ECB did not object to lowering the ceiling by EUR 3.8 bln, which reflects an improvement of the liquidity situation of Greek banks amid a reduction of uncertainty and the stabilisation of private sector deposit flows, as well as the progress achieved in the recapitalisation process of Greek banks”.

Fed Beige Book: “mostly positive” was the outlook on future economic growth in the District reports for the January 26-27 FOMC meeting, seeming to supplant the “modest to moderate” mantra that had been in place for more than a year. Labor markets were seen to have tightened further, in four districts along with “flat to moderate” wage pressures, half reporting higher wage pressures for more skilled workers and those positions in short supply. Manufacturing remained weakened, with the declines in commodities/oil, the stronger dollar, and slipping global demand remaining headwinds for most districts (energy sector hurt in particular). Consumer spending was moderate, though credit conditions generally improved, along with growth in loan demand. The Book was prepared by the Philly Fed with data collected before January 4, which wouldn’t include the December payrolls print.

Chicago Fed dove Evans said he pays attention to international developments and how they impact the U.S. economy, noting he will monitor the effects of the decline in China’s growth. We thought he might take this global path on the economic outlook and monetary policy, given his dovish credentials. In addition, he says that the Fed is about as transparent as it can be.

Main Macro Events Today

• Bank of England interest rate decision: The BoE policy announcement is widely expected to see the bank leave policy unchanged. We expect the vote also to remain unchanged from last month, with 8-1 in favour of leaving the repo rate at its historic low of 0.5%. Come March, it’ll be seven years that the rate has been at this level and we don’t expect a tightening until later in the year. Last week’s December PMI survey data were sympathetic to the view that the BoE is likely to tighten policy later and it will be interesting to see in the minutes in how far the most recent bout of risk aversion and the slump in oil prices have rattled policy makers.
• ECB Monetary Policy Meeting Accounts: markets wait for Draghi’s views on economic and monetary developments.
• US Jobless Claims:S. initial jobless claims are expected to be 272k (median 270k) in the week-ended January 9. Continuing claims are expected to fall to 2,200k for the week-ended January 2. Forecast risk: downward, as layoffs from holiday hiring could boost claims. Market risk: downward, as weaker than expected data could slow the path of rate hikes.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

Oil prices are pushing 12-year lows, trading below $31 bbl at the time of writing, as concerns about the global economy push traders into risk-off mode.

Commodity related currencies are under-performing the USD, with the AUD, NZD, and CAD all under pressure.

The U.S. Dow Jones stock markets closed higher on Monday, suggesting that the recent stock market sell off is starting to stabilize.

The EUR attempted to rally back over 1.0900, however failed to keep gains and fell back into the mid 1.08’s with the EURUSD lacking any meaningful direction without any market moving European economic data.

The economic calendar for today does not have any heavy data release on tap, apart from the GBP Industrial Production and the USD November JOLTS job opening survey.

Main Macro Events Today

• GBP U.K. November Industrial Production: Analyst expected a rise of 0.1% m/m, actual missed , and came in lower at -0.4%.

• USD Fed’s Stanley Fischer to Speak: No commentary

• EUR ECB speak from Praet and Lautenschlaeger: On January 6, 2016 Praet said the following “the ECB stands ready to take all measures that are necessary to bring inflation to 2%. If you print enough money you will always get inflation. Always”. “But if oil and commodities prices tumble, it is more difficult to allow inflation to rise. If a whole series of such factors occur, you can’t do anything other than somewhat postpone the data on which you seek to reach the higher rate of inflation”. “The emergence of bubbles is a justified concern”.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.