FINANCIAL MARKETS AWAIT INFLATION FIGURES FROM THE TWO LARGEST ECONOMIES IN THE WORLD
CPI AND CONSUMPTION
During the upcoming trading week, financial markets will be focused on the release of CPI inflation data from the United States and Chinese economies. The U.S CPI release will likely set the tone for the U.S dollar and stock markets, as the Federal Reserve remains concerned about subdued domestic inflation, despite strong economic and jobs growths in the Amercian economy.
We also see Retail Sales figures from the eurozone, Chinese, Australian and U.S economies, which will give investors a good indication of year-end spending patterns and global consumption. The UK economy is also in the spotlight, with the release of Manufacturing and Industrial production figures for the month of December.
Monday 8th January, Switzerland CPI
The Swiss economy releases key CPI inflation figures for the month of December, with most economists expecting that month-on-month inflation will again decline, falling -0.1 percent. Year-on-year inflation is however expected to have increased by 0.8 percent, which is in-line with the same period last year.
The USDCHF pair is expected to remain under selling pressure while trading below the 0.9770 area, further losses towards 0.9640 and 0.9540 seem likely.
If price-action start to trade above the 0.9770 level, further upside towards 0.9840 and 0.9890 remains possible.
Tuesday 9th January, U.S Jolts Job Openings
U.S jobs openings are expected to have increased during the month of November, as more American companies seek full and part-time workers. The JOLTS jobs opening survey helps to measure job vacancies in the U.S economy, it collects data from employers about employment, job openings, recruitment, hires and separations. JOLTS only defines job openings, as all positions that are open on the last business day of the month.
The U.S dollar index is likely to remain under heavy selling pressure while trading below the 92.60 level. Sellers may target the 91.50 and 90.80 support levels.
Should price-action start to trade above the 92.60 level, upside resistance is found at 92.90 and 93.30 on the U.S dollar index.
Wednesday 10th January, Chinese CPI
The Chinese economy releases key December CPI inflation data on Wednesday, with most economists expecting CPI to start to move higher. Monthly CPI is expected to have increased by 0.4 percent, while year-on-year CPI is forecasted at 1.9 percent.
The Consumer Price Index measures the change in the price of goods and services, from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation in the Chinese economy.
Thursday 11th January, Australian Retail Sales
Australian Retail Sales are expected to have increased 0.4 percent during the month of December, which is marginally lower than the previous months 0.5 percent reading.
Retail Sales measure the change in the total value of inflation-adjusted sales at a retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.
The AUDUSD pair is expected to remain bullish while trading above the 0.7820 level, buyers are expected to target towards the 0.7910 and 0.8050 levels.
Should price-action start to trade above the 0.7820 level, downside support is located at 0.7770 and 0.7715.
Friday 12th January, U.S CPI
Most economists expect that U.S inflation will have increased 0.2 percent during the month of December, which is worse than the previous months 0.4 percent reading. Year-on-year CPI inflation is also expected in at 2.1 percent, which is slightly lower than the 2.2 percent seen at the same period last year.
A higher than expected CPI inflation reading should be taken as bullish for the U.S dollar index, while a lower than expected CPI inflation reading should be taken as bearish for the U.S dollar index.