Mixed Retail Sales and US PCE Data Keep Markets Steady
Friday begins with a focus on retail sales and inflation indicators from major economies. The Eurozone’s PPI figures and the UK’s retail sales missed expectations adding concerns about economic momentum. Weak retail sales can indicate softer demand, which in turn may reduce inflationary pressures. However they can also point to slower economic activity, raising concerns about stagnation. US core PCE data later today will be critical in shaping market sentiment as the week wraps up.
Key Data Out Today
- Eurozone PPI (Nov): Up 0.5% MoM, better than the expected 0.3%, but YoY remains subdued at 0.1%.
- UK Retail Sales (Nov): Disappointed at 0.2% MoM and 0.5% YoY, missing forecasts of 0.5% and 0.8%, respectively.
- Canada Retail Sales (Oct): Data due later, expected at 0.7% MoM, with ex-autos at 0.5%.
- US Core PCE Price Index (Nov): Forecast at 0.2% MoM and 2.9% YoY, key for inflation outlook.
- US Personal Spending (Nov): Expected at 0.5%, reflecting holiday season dynamics.
Energy & Precious Metals
Energy:
- Crude Oil: WTI down 0.41% to $69.09, and Brent lower at $72.51 (-0.50%), as concerns over slowing global demand weigh on prices.
- Natural Gas: Up slightly, reflecting colder weather patterns in the US boosting short-term demand.
Precious Metals:
- Gold: Gained 0.50% to $2606.40/oz, supported by cautious market sentiment ahead of US PCE data.
- Silver: Flat at $29.03/oz, reflecting subdued industrial demand and a firmer dollar.
Currency Movements
EUR/USD
- The EUR/USD pair is trading around 1.0375, showing a slight increase of 0.13% for the day. Historically, December has been the most bullish month for EUR/USD, with an average return of 1.23% over the past 50+ years.
GBP/USD
- GBP/USD is hovering near 1.2505, with a marginal daily gain of 0.02%. The pair has been trading within a tight range, with the 200-day Simple Moving Average (SMA) at 1.2822 acting as a resistance level. A break above this level could negate the bear flag formation, potentially leading to further gains.
AUD/USD
- AUD/USD is trading at approximately 0.6240, showing a minimal daily increase of 0.03%. December has historically been a strong month for AUD/USD, with an average gain of 0.66%. However, recent technical analysis suggests the pair may continue its downward trend towards the local target of 0.6220.
NZD/USD
- NZD/USD stands at around 0.5635, with a slight daily decline of 0.10%. The pair has been on a downward trajectory, with technical forecasts indicating a potential continuation towards the main target of 0.5454.
USD/JPY
- USD/JPY is trading near 156.83, down 0.37% for the day. December has historically been the most bearish month for USD/JPY, with an average decline of 0.61%. The pair is currently exhibiting bearish momentum, aligning with its seasonal tendency.
USD/CNY
- USD/CNY is relatively stable at 7.3070, showing a minor daily decrease of 0.03%. The pair has experienced modest fluctuations, reflecting concerns about slowing growth in China.
USD/CHF
- USD/CHF is trading around 0.8976, down 0.16% for the day. The pair has been maintaining its upward trajectory, with technical analysis suggesting a potential rise towards 0.9026 as the first target.
USD/CAD
- USD/CAD stands at approximately 1.4393, with a slight daily decline of 0.04%. The pair has been on an upward trajectory, with forecasts indicating a potential continuation towards 1.4514 as the main target.
USD/MXN
- USD/MXN is trading near 20.307, down 0.04% for the day. The pair has shown stability despite subdued risk appetite, with the peso holding steady.
USD/INR
- USD/INR is relatively unchanged at 85.0725, showing a minor daily decrease of 0.04%. The pair reflects cautious sentiment in emerging markets, with modest fluctuations observed.
Things to Keep an Eye On
- US Core PCE Data: A key inflation gauge for the Federal Reserve’s future policy direction.
- UK Retail Sales Reaction: Weak November data could pressure the pound further.
- Energy Prices: Watch for further declines in crude oil as demand concerns linger.
- Canada Retail Sales: Performance could drive near-term movements in USD/CAD.