15 Feb: US$ lower after weak retail sales data. China CPI ahead. Trade talk headlines to dominate later in the day.

By | February 15, 2019

The US$ generally traded lower by the end of the US session on the back of some very weak retail sales data. The headline figure fell by 1.2%, way below the expectation of a 0.1% mm rise, the largest decline in nine years since September 2009, while the ex-auto sales dropped by -1.8% versus expectation of 0.0% mm. On top of this, the headline US PPI slowed to 2.0% yy in January, down from 2.5% yy and missed expectation of 2.1% yy while the core PPI slowed to 2.6% yy, down from 2.7% yy but beat expectation of 2.5% yy.

While most currencies made some gains against the dollar, the exception was Cable, which traded to one-month lows after UK PM Theresa May lost a another Brexit vote in parliament, weakening her hand as she seeks to renegotiate her withdrawal agreement with the EU.

European data showed that Eurozone GDP grew 0.2% qq in Q4, unchanged from Q3 and matched expectations,  but German GDP stagnated in Q4 and grew 0.0% qq, just enough to avoid a technical recession following a -0.2% contraction in Q3. The figures did little to help the Euro although it did squeeze higher following the US data miss.

In other markets, the metals rose by around 0.5%, underpinned by the weaker dollar while WTI also traded on a firm note, up by around 0.9%, but not before a sharp dip following the US data. Stocks also dipped lower on the release of the data but then recovered to finish the day pretty much unchanged.

Looking ahead, Friday will focus on the US/China trade talks but traders will also look to the China CPI (exp 0.5%, 1.9%yy) and PPI (exp 0.2%yy) for guidance. Later on we get the UK Retail Sales (exp 0.2%mm, 3.4%yy) the EU Trade Balance and some secondary US data; the York State Empire Mfg Index, Import/Export Index, Industrial Production (exp 0.1%), Capacity Utilisation (exp 78.7%) and the Michigan Consumer Sentiment Index. have a good weekend.

Economic data highlights will include:                                      

Fri: NZ Business PMI, NZ Visitor Arrivals, China CPI, PPI, Japan Capacity Utilisation, Industrial Production, UK Retail Sales, EU Trade Balance, US New York State Empire Mfg Index, Import/Export Index, Industrial Production, Capacity Utilisation, Michigan Consumer Sentiment Index, Fed’s Bostic Speech.

CURRENCIES
EURUSD: 1.1301
Res  1.1310  1.1340  1.1370
Sup  1.1280  1.1215  1.1250
USDJPY: 110.51
Res  110.75  111.00  111.15
Sup  110.30  110.00  109.65
GBPUSD: 1.2802
Res  1.2830  1.2860  1.2890
Sup  1.2770  1.2740  1.2710
USDCHF: 1.0046
Res  1.0070  1.0100  1.0130
Sup  1.0030  1.0000  0.9975
AUDUSD: 0.7104
Res  0.7110  0.7120  0.7130
Sup  0.7095  0.7085  0.7070
NZDUSD: 0.6840
Res  0.6855  0.6870  0.6885
Sup  0.6820  0.6800  0.6780
INDICES / COMMODITIES
S&P.fs: 2751.03
Res  2765.00  2780.00  2795.00
Sup  2740.00  2725.00  2710.00
DJ30.fs: 25485.00
Res  25605.00  25830.00  26025.00
Sup  25335.00  25175.00  25030.00
SPI200.fs: 6012
Res  6030  6055  6085
Sup  6000  5980  5955
XAUUSD: 1313.07
Res  1315.00  1320.00  1325.00
Sup  1310.00  1305.00  1300.00
XAGUSD: 15.62
Res  15.75  15.90  16.05
Sup  15.50  15.35  15.20
WTI.fs: 54.51
Res  55.60  56.60  57.60
Sup  53.50  52.40  51.15