Market Roundup
• UK CPI (YoY) (Dec): 3.4%, 3.3% forecast, 3.2% previous.
• UK PPI Input (MoM) (Dec): -0.2%, -0.1% forecast, 0.5% previous.
• UK CPI (MoM) (Dec): 0.4%, 0.4% forecast, -0.2% previous.
• UK CPIH (YoY) (Dec): 3.6%, 3.5% previous.
• UK PPI Input (YoY) (Dec): 0.8%, 1.1% previous.
• UK Core PPI Output (MoM) (Dec): -0.1%, 0.1% previous.
• UK Core PPI Output (YoY) (Dec): 3.2%, 3.6% previous.
• UK PPI Output (YoY) (Dec): 3.4%, 3.4% previous.
• UK RPI (MoM) (Dec): 0.7%, 0.5% forecast, -0.4% previous.
• UK RPI (YoY) (Dec): 4.2%, 4.1% forecast, 3.8% previous.
• UK Core RPI (MoM) (Dec): 0.7%, -0.5% previous.
• UK CPI (n.s.a) (Dec): 140.10, 139.50 previous.
• UK Core RPI (YoY) (Dec): 4.1%, 3.7% previous.
• UK Core CPI (YoY) (Dec): 3.2%, 3.3% forecast, 3.2% previous.
• UK Core CPI (MoM) (Dec): 0.3%, 0.3% forecast, -0.2% previous.
• UK PPI Output (MoM) (Dec): 0.0%, 0.1% forecast, 0.1% previous.
Looking Ahead Economic Data (GMT)
•15:00 US Pending Home Sales (MoM) (Dec)-0.3% forecast,3.3% previous.
•15:00 US Construction Spending (MoM) (Oct)0.1% forecast,0.2% previous.
•15:00 US Pending Home Sales Index (Dec)79.2 previous.
•17:00 US Atlanta Fed GDPNow (Q4)5.3% forecast,5.3% previous.
Looking Ahead Events And Other Releases (GMT)
•16:45 ECB President Lagarde Speaks
Currency Forecast
EUR/USD : The euro firmed against dollar on Wednesday as greenback remained under pressure amid heightened tensions between the U.S. and NATO over Greenland. On Tuesday, Trump said there was"no going back" on his goal to control Greenland, refusing to rule out taking the Arctic island by force and lashing out at NATO allies.He later said, "we will work something out where NATO is going to be very happy and where we're going to be very happy."Meanwhile, French President Emmanuel Macron has pushed for the EU to consider the first use of its Anti-Coercion Instrument, informally known as the "trade bazooka", which could limit U.S. access to public tenders or restrict trade in services such as tech platforms. Macron said on Tuesday it was "crazy" it had gone that far. Immediate resistance can be seen at 1.1732(38.2%fib), an upside break can trigger rise towards 1.1806(23.6%fib).On the downside, immediate support is seen at 1.1701(SMA 20), a break below could take the pair towards 1.1666(50%fib).
GBP/USD: Sterling eased slightly on Wednesday as traders assessed the latest UK inflation figures and their implications for monetary policy.British inflation rose by more than expected in December, pushed higher by air fares and tobacco prices, but the fastest rate of price growth among the world's big, rich economies is still likely to slow sharply in the coming months.Investors held steady on their bets on the Bank of England cutting interest rates later this year with services price inflation, which is closely watched by the central bank, edging up in line with analysts' forecasts. Headline inflation headed up for the first time since July, climbing to 3.4% from 3.2% in November, the Office for National Statistics said, above a median forecast of a rise in consumer price inflation to 3.3% in a poll of economists.Immediate resistance can be seen at 1.3460(38.2%fib), an upside break can trigger rise towards 1.3496(Jan 12th high).On the downside, immediate support is seen at 1.3370(50%fib), a break below could take the pair towards 1.3331(Lower BB).
AUD/USD: The Australian dollar firmed on Wednesday as rising geopolitical tensions continued to weigh on the US dollar.On Monday, President Donald Trump’s renewed tariff threats over Greenland triggered a fresh wave of the “Sell America” trade seen after last April’s tariff moves. Investors sold US dollar on fears of prolonged uncertainty, strained alliances, weakening confidence in U.S. leadership, possible retaliation, and faster de-dollarisation.Looking ahead, investors awaited Australian jobs data this week, with December employment seen rising about 30,000 and the unemployment rate edging up to 4.4%.In the U.S., focus will be on third-quarter GDP data, expected to show annualized growth of 4.3%, and November core PCE inflation, forecast at 0.2% month-on-month. Immediate resistance can be seen at 0.6749(Higher BB), an upside break can trigger rise towards 0.6768(23.6%fib).On the downside, immediate support is seen at 0.6701(38.2%fib), a break below could take the pair towards 0.6699(SMA 20)
USD/JPY: The U.S. dollar dipped against the yen on Wednesday as investors were cautious amid intervention fears, hawkish BoJ expectations..Investors also eyed the Bank of Japan’s policy meeting later this week, where rates are widely expected to stay unchanged following a December hike.Traders remained alert to potential yen intervention amid worries about the impact of a weaker currency on domestic inflation.Japan's chief cabinet secretary said on Tuesday the government was watching long-term rates moves closely.Inflation has been running above the Bank of Japan's target for nearly four years and Takaichi's platform of more spending is driving worries it gets out of hand and has been pushing down on the currency. Immediate resistance can be seen at 159.21(23.6%fib) an upside break can trigger rise towards 160.00(Psychological level) .On the downside, immediate support is seen at 158.00(Psychological level) a break below could take the pair towards 157.11 (SMA 20).
Equities Recap
European shares fell on Wednesday, extending losses as Greenland-linked trade tensions outweighed positive corporate updates.
At (GMT 13:30),UK's benchmark FTSE 100 was last trading down at 0.19 percent, Germany's Dax was down by 1.36 percent, France’s CAC was last down by 0.58 percent.
Commodities Recap
Gold prices extended their record run to breach the $4,800 per ounce level on Wednesday on safe-haven flows driven by escalating friction between the United States and NATO over Greenland.
Spot gold climbed 2.1% to $4,861.91 per ounce by 1152 GMT, after scaling a record $4,887.82 earlier in the session. U.S. gold futures for February delivery climbed 2.1% to $4,864.80 per ounce.
Oil prices rose on Wednesday as markets weighed Kazakhstan supply disruptions, a potential U.S. crude stock build, and fresh geopolitical tensions linked to U.S. tariff threats over Greenland.
Brent futures gained 20 cents, or 0.3%, to $65.12 a barrel at 1215 GMT. The U.S. West Texas Intermediate crude contract rose 18 cents, also 0.3%, to $60.54 a barrel.
