Uncle Sam is about to drop its retail gross sales figures for the month of December!
What are the markets anticipating and the way may the report have an effect on USD/JPY’s uptrend?
Earlier than shifting on, ICYMI, yesterday’s watchlist checked out EUR/AUD’s development line help forward of China’s knowledge dump. Remember to take a look at if it’s nonetheless a very good play!
And now for the headlines that rocked the markets within the final buying and selling classes:
Recent Market Headlines & Financial Information:
China’s GDP grew by 5.2% in 2023, larger than the federal government’s 5.0% aim and Q3’s 4.9% annual development
China’s industrial manufacturing for December: 6.8% y/y (6.6% y/y anticipated and former)
China’s fastened asset funding for December: 3.0% ytd/y (2.9% ytd/y forecast and former)
China’s unemployment fee ticked larger from 5.0% to five.1% in December
China’s retail gross sales slowed down from 10.1% y/y to 7.4% y/y in December
Reuters’ Tankan ballot confirmed morale amongst large Japanese producers slid for the primary time in 4 months in January, down from +12 to +6; the Non-manufacturing index improved from +26 to +29
U.Ok.’s inflation unexpectedly picked up in December – The annual CPI is up from 3.9% to 4.0% (3.8% anticipated); core CPI remained at 5.1% (4.9% anticipated)
U.Ok.’s PPI enter in December: -1.2% m/m (-0.6% m/m forecast, -0.4% m/m earlier); PPI output at -0.6% m/m (-0.2% m/m forecast, 0.0% m/m earlier)
ECB President Lagarde: Aggressive fee minimize bets “should not serving to” the ECB’s combat in opposition to excessive inflation
Worth Motion Information
Overlay of AUD vs. Main Currencies Chart by TradingView
Danger aversion remained the secret in the course of the Asian and early European session buying and selling.
Current headlines didn’t assist. China’s annual development barely missed market estimates whereas retail exercise rose the slowest in three months in December.
In the meantime, European Central Financial institution (ECB) President Lagarde shared that aggressive fee hike speculations are “not serving to” the ECB’s combat in opposition to excessive inflation, which added to bets that the markets must tweak their costs to replicate fewer or no less than much less aggressive fee cuts from the main central banks.
Not surprisingly, the China-related AUD took hits from the weak(ish) Chinese language knowledge and total threat aversion.
AUD is buying and selling within the pink throughout the board, with the deepest losses recorded in opposition to GBP and USD whereas the least losses are seen in opposition to NZD and JPY.
Upcoming Potential Catalysts on the Financial Calendar:
U.Ok.’s home worth index at 9:30 am GMT
Eurozone’s closing December CPI at 10:00 am GMT
U.S. retail gross sales at 1:30 pm GMT
FOMC member Michael Barr to provide a speech at 2:00 pm GMT
FOMC member Michelle Bowman to provide a speech at 2:00 pm GMT
U.S. industrial manufacturing at 2:15 pm GMT
ECB President Lagarde to provide a speech at 3:15 pm GMT
Japan’s core equipment orders at 11:50 pm GMT
Australia’s MI inflation expectations at 12:00 am GMT (Jan 18)
Australia’s labor market knowledge at 12:30 am GMT (Jan 18)
Use our new Foreign money Warmth Map to rapidly see a visible overview of the foreign exchange market’s worth motion! ️
USD/JPY 15-min Foreign exchange Chart by TradingView
In a couple of hours, we’ll see the U.S. December retail gross sales report. Phrase round is that we’ll see barely slower exercise, with annual retail exercise ticking decrease from 4.1% to 4.0% whereas core retail exercise retains its 0.2% uptick.
Greater retail numbers would seemingly give merchants another reason to purchase the U.S. greenback. In case you’re simply beginning your week, the Dollar has been making pips rain as some merchants alter their expectations to replicate fewer rate of interest cuts or no less than an extended interval earlier than the primary fee minimize from the main central banks.
In the meantime, the Japanese yen is discovering it laborious to get traction from the chance aversion. Japan has additionally not too long ago printed spotty financial exercise stories, which doesn’t give JPY bulls confidence.
Can USD/JPY prolong its January uptrend immediately?
The pair appears to have discovered resistance from the R1 (147.80) Pivot Level line regardless of early European session gamers nonetheless feeling the general threat aversion.
The 147.00 – 147.30 space of curiosity could attract bulls if we do see USD/JPY pull again to the extent. As you possibly can see, it’s near the development line and 100 SMA help within the 15-minute timeframe.
If USD/JPY finds help within the space, then we might even see the pair revisit its weekly highs close to 148.80. USD/JPY could even hit new intraweek highs if there’s a recent basic catalyst for extra USD positive factors.
Watch the U.S. retail gross sales report and the general threat sentiment image to see if (a) USD/JPY can drop down all of the to the development line zone earlier than discovering help or if (b) USD/JPY will discover sufficient basic and technical momentum to increase its January downtrend.
Good luck and good buying and selling, errbody!
