Forex Weekly Outlook January 9-13

The US dollar wobbled in the wake of 2017, torn between good and bad news. US Retail sales, consumer sentiment and PPI stand out. These are the highlights for this week. Join us as we explore the market movers on forex calendar.

The US monthly employment report showed a lower than expected job growth in December but wages registered a 2.9% annualized gain. The economy added 156,000 positions while expected to increase 175,000. The unemployment rate edged to 4.7% from 4.6%. However, wage growth was the most significant factor in December’s report as average hourly wages jumped 10 cents to $26, the highest gain since 2009, indicating the US labor market has fully recovered. The final report of 2016 also comes amidst a presidential transition period. Donald Trump has promised aggressive fiscal measures including tax cuts and higher domestic spending to boost economic growth beyond the mild expansion witnessed so far. Let’s start:

  1. US Crude Oil Inventories: Wednesday, 15:30. U.S. crude stocks contracted sharply at the end the year, showing a draw of 7 million barrels, but stocks of gasoline and distillates surged as refineries expedited production to reduce crude inventories in order to avoid higher taxes. Oil prices increased as Saudi Arabia consented to OPEC’s plea to reduce output after prices fell on Us data.
  2. US Unemployment Claims: Thursday, 13:30. The number of Americans filing new claims for unemployment benefits declined last week to near a 43 year low, confirming yet again the continuous improvement in the labor market. Claims declined 28,000 to a seasonally adjusted 235,000 for the week ended Dec. 31. The four-week moving average of claims declined 5,750 reaching 256,750. The number of weekly unemployment claims have remained below the 300,000 threshold associated with a healthy labor market, for 96 consecutive weeks. Economists expected a higher reading of 262,000.
  3. US Retail sales: Friday, 13:30. U.S. retail sales expanded less than forecast in November, following strong gains in the previous two months. Sales increased 0.1% after rising 0.6% in October. Economists expected a 0.3% gain. Consumer spending strengthened recently amid continued solid job gains as well as rising wages, raising consumer’s optimism about their finances. Meanwhile, core sales, excluding automobiles and service stations increased 0.2%, while anticipated to rise 0.4%.
  4. US PPI: Friday, 13:30. U.S. producer prices soared in November amid rising costs for services, indicating inflation pressures are steadily rising. Prices of finished goods increased 0.4% registering their largest gain since June, after a flat reading in October. In the 12 months through October, the PPI gained 1.3%, the biggest increase since November 2014. Producer prices have rebounded from last year’s plunge in oil prices and are expected to offset deflationary effects from the dollar’s renewed strength.
  5. US UoM Consumer Sentiment: Friday, 15:00. University of Michigan’s December survey showed consumer’s climate hit the highest level since January 2015. The Index of Consumer Sentiment reached 98 points compared to 93.8 in November. Economists expected a milder rise to 94.3. The surge was mainly due to Trump’s surprise victory. Consumers expressed high hopes from the new economic policies planned by the newly elected president.

That’s it for the major events this week. Stay tuned for coverage on specific currencies

*All times are GMT.


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