Market Roundup
• German CPI (MoM) (Dec): 0.0%, 0.0% forecast, -0.2% previous.
• German CPI (YoY) (Dec): 1.8%, 1.8% forecast, 2.3% previous.
• German HICP (MoM) (Dec): 0.2%, 0.2% forecast, -0.5% previous.
• German HICP (YoY) (Dec): 2.0%, 2.0% forecast, 2.6% previous.
• Italian HICP (MoM) (Dec): 0.2%, 0.2% forecast, -0.2% previous.
• Italian HICP (YoY) (Dec): 1.2%, 1.2% forecast, 1.1% previous.
• Italian CPI (MoM) (Dec): 0.2%, 0.2% forecast, -0.2% previous.
• Italian CPI (YoY) (Dec): 1.2%, 1.2% forecast, 1.1% previous.
Looking Ahead Economic Data (GMT)
•14:15 US Industrial Production (YoY) (Dec): 2.52% previous.
•14:15 US Industrial Production (MoM) (Dec): 0.1% forecast, 0.2% previous.
•14:15 US Manufacturing Production (MoM) (Dec): -0.2% forecast, 0.0% previous.
•14:15 US Capacity Utilization Rate (Dec): 76.0% forecast, 76.0% previous.
•14:15 US NAHB Housing Market Index (Jan): 40 forecast, 39 previous.
Looking Ahead Economic Data (GMT)
• 15:50 USFed Collins Speaks
•16:00 USFOMC Member Bowman Speaks
Currency Forecast
EUR/USD : The euro edged higher but gain were limited were as tensions within NATO over Greenland fuelled global risk aversion. European countries sent small numbers of military personnel to the Danish territory on Thursday as Denmark said it was pressing on with plans for a "larger and more permanent" NATO presence to secure the island. Elsewhere, the European Central Bank chief economist Philip Lane said the central bank will not debate any rate change in the near term if the economy stays on course, but new shocks, like a potential deviation by the Fed from its mandate, could upset the outlook.The ECB has kept rates on hold since ending a rapid rate cut cycle in June and signalled last month that it was in no hurry to change policy again. Immediate resistance can be seen at 1.1653(Jan 15th high), an upside break can trigger rise towards 1.1690(50%fib).On the downside, immediate support is seen at 1.1600(38.2%fib), a break below could take the pair towards 1.1553(Lower BB).
GBP/USD: Sterling rose against dollar after data this week showed that the British economy grew more strongly than expected in November.Data on Thursday showed UK gross domestic product recorded the fastest growth in November since June, boosted by a return to full production at Jaguar Land Rover after a cyberattack that hit the carmaker and its suppliers.Investors continued to almost fully price in two quarter-point interest rate cuts by the Bank of England this year. But markets are not fully pricing in a 25-basis-point reduction until June, and they see only a 6% chance of a cut when the central bank meets next month. 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 Friday as Aussie held steady as rising global equities offset pressure from a firmer greenback.The RBA left its cash rate unchanged at 3.6%, acknowledging softer inflation that is still above the 2%–3% band .Australia’s economy is slowing gradually, maintaining the narrative of a soft landing without triggering alarm.Markets are now pricing in a 27% chance of a quarter-point rate hike at the RBA’s February meeting, with expectations rising sharply to around 76% by May.Attention now turns to the Q4 CPI later this month, with next week’s December jobs report also expected to provide further insights. Immediate resistance can be seen at 0.6729(Jan 13th high), an upside break can trigger rise towards 0.6758(23.6%fib).On the downside, immediate support is seen at 0.6690(SMA20), a break below could take the pair towards 0.6672(38.2%fib)
USD/JPY: The U.S. dollar dipped on Friday as yen firmed amid lingering intervention risks tied to excessive Yen weakness. Japanese Finance Minister Katayama said all options remain on the table to address the yen’s slide to a 1½-year low.Japan’s markets face uncertainty as PM Takaichi dissolves parliament and the central bank prepares for a policy decision.PM Takaichi is expected to brief ruling bloc officials on Jan. 19 about the dissolution of the lower house.The Japanese currency has fallen on expectations that Prime Minister Sanae Takaichi may have more leeway to introduce more fiscally expansionist policies pending a snap election expected early next month. Warnings from Japanese policymakers that they stand ready to act against one-way movements in foreign exchange markets have given the yen brief boosts. 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 157.22(SMA 20) a break below could take the pair towards 156.87 (38.2%fib).
Equities Recap
European shares paused on Friday as falling gold prices weighed on miners, offsetting gains in defence stocks.
At (GMT 12:18),UK's benchmark FTSE 100 was last trading down at 0.64percent, Germany's Dax was down by 0.32 percent, France’s CAC was last down by 0.64 percent.
Commodities Recap
Oil edged higher on Friday as supply risks stayed in focus despite easing fears of a U.S. strike on Iran.
Brent crude gained 66 cents, or 1.04%, to $64.42 a barrel by 1302 GMT, on course for a fourth consecutive weekly gain. U.S. West Texas Intermediate rose 62 cents, or 1.05%, to $59.81.
Gold extended losses on Friday as strong U.S. data and easing Iran tensions weighed on bullish momentum.
Spot gold eased 0.1% to $4,610.86 per ounce by 1217 GMT. However, the metal is poised for a weekly gain of about 2% after scaling a record peak of $4,642.72 on Wednesday.
U.S. gold futures for February delivery edged 0.2%lower to $4,615.
