Midweek trading on Wednesday, 15 January 2025, will centre on critical economic data and corporate earnings, offering fresh insights into economic conditions and setting the tone for the rest of the month.
Wednesday’s session is expected to be data-driven, with retail sales and PPI figures shaping market sentiment.
KEY INDICATORS
US retail sales report
December’s retail sales: This key report will reveal the strength of consumer spending during the crucial holiday season.
Investors will analyse the data to assess consumer resilience amidst elevated interest rates, with implications for retail, e-commerce, and discretionary stocks.
Producer Price Index (PPI)
November’s PPI data: This release will provide another perspective on inflation pressures from the supply side.
A softer reading could bolster expectations for a pause in monetary tightening, whereas a hotter-than-expected figure may reignite inflation concerns.
Corporate earnings momentum
Financial sector focus: As major banks and financial institutions continue reporting Q4 results, investors will look for insights into credit demand, loan growth, and the impact of higher rates.
Technology sector updates: Select technology companies may also release results or guidance, offering early indications of how the sector is adapting to economic headwinds.
MARKET MOVERS
USD/JPY
Possible short preference Short positions below 156.74 with targets at 156.50 & 156.28 in extension. Alternative scenario Above 157.39 look for further upside with 157.70 & 157.90 as targets. The immediate trend remains down, and the momentum is strong.
Japanese yen bulls regain control on BoJ Governor Ueda’s hawkish remarks and intervention fears
The Japanese yen attracts fresh buyers following hawkish remarks from Bank of Japan (BoJ) Governor Kazuo Ueda.
Intervention fears further underpin the yen and weigh on USD/JPY amid subdued US dollar demand.
The risk-on sentiment and the recent widening of the US-Japan yield differential may cap yen gains.
The Japanese yen builds on its intraday ascent against its US counterpart heading into the European session, driven by Governor Ueda’s hawkish stance.
Additionally, comments from Japan’s Finance Minister Katsunobu Kato have revived fears of potential government intervention, providing further support to the yen.
Combined with muted US dollar price action, this has dragged the USD/JPY pair to the 157.20 area, marking a fresh daily low in the past hour.
USD/JPY tumbles to near 157.00 as Yen strengthens after BoJ Ueda’s hawkish remarks Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI) Next release: Wed Jan 15, 2025 13:30 Frequency: Monthly Consensus: 2.9% Previous: 2.7%
XAU/USD
Possible long preference Long positions above 1.0323 with targets at 1.0339 & 1.0356 in extension. Alternative scenario Below 1.0292 look for further downside with 1.0281 & 1.0261 as targets. Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
TODAY’S NEWS HEADLINES
Pound sterling weakens against euro and dollar after inflation data undershoots
The British pound reached a new multi-week low against the euro and softened against the US dollar after UK inflation fell short of expectations.
The pound-to-euro exchange rate dipped to 1.1831 following the ONS report that UK CPI inflation rose by 2.5% in the 12 months to December 2024, down from 2.6% in November, missing the consensus estimate of 2.7%.
The pound-to-dollar exchange rate fell to 1.2184.
Inflation rose by 0.3% month-on-month in December, below the forecasted 0.4% gain.
Core inflation increased by 3.2% year-on-year in December, down from 3.5% and below the 3.4% estimate.
Notably, service inflation—a key metric for the Bank of England—declined from 5.0% to 4.4%.
Gold prices steady with CPI data in focus
Gold prices remained relatively stable in Asian trade on Wednesday as traders awaited key US consumer inflation data, although slight dollar weakness provided some support to bullion.
Spot gold edged up by 0.1% to USD 2,675.90 an ounce.
Gold futures expiring in February rose by 0.3% to USD 2,690.91 an ounce as of 4:49 AM GMT.
Platinum futures fell by 0.5% to USD 944.75 an ounce.
Silver futures increased by 0.2% to USD 30.427 an ounce.
Oil prices muted as key US inflation data looms
Oil prices remained largely steady in Asian trade on Wednesday as traders exercised caution ahead of a closely watched US inflation report, with prices hovering near a four-month high.
At 1:58 AM GMT, Brent oil futures were unchanged at USD 79.95 a barrel.
Crude oil WTI futures expiring in March inched up by 0.1% to USD 76.45 a barrel.
The Producer Price Index (PPI) rose by 0.2% in December, aligning with forecasts and reflecting a slowdown from November’s 0.4% increase.
