Market Brief: Pre-Christmas consumer spending boosts Eurozone inflation
Fawad Razaqzada January 7, 2020 1:06 PM
A summary of news and snapshot of moves ahead of the US session.
- Market update at 12:0 GMT: Among the major currencies, the EUR and USD were the strongest while AUD and GBP were the weakest; stocks were higher, crude oil lower and gold flat.
View our guide on how to interpret the FX Dashboard
- EUR strengthened as Eurozone CPI inflation climbed to a six-month high of 1.3% (up from 1.0% previously but in line with expectations) thanks to strong pre-Christmas consumer spending, which saw retail sales rise a good 1.0% month-over-month in November (vs. +0.6% expected).
- AUD was the weakest as the implied probability of a Feb rate cut rose more than 50% due to the economic damage of the wildfires raging across Australia.
- As optimism over a phase one trade deal between the world’s largest economies rise, it is no wonder to see the yuan strengthening to its best level since August, causing the closely-followed USD/CNH pair to break down.
- The escalation of tensions between the US and Iran may have underpinned safe-haven gold and caused a spike in crude oil prices over the past few days, but its impact on the wider markets have been minimal, even if Tehran has promised "severe revenge" for the death of Soleimani. Global stocks were rebounding, oil prices were weaker, and gold was flat at the time of writing.
- In major company news:
- Aston Martin issued a fresh profit warning as its sales dropped, causing its shares to fall more than 12%.
- Morrison shares rose 2% after the UK’s fourth largest supermarket posted better-than-expected same-store sales, even if they were down 1.7% in the second half (compared with a drop of 2.2% expected by analysts)
- Coming up: ISM Services PMI (54.5 expected) and US factory orders (-0.6% m/m expected) at 15:00 GMT.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.