Headlines:
- Dollar holds firmer as we get into European morning trade
- Sterling slips on cooler UK inflation numbers
- UK January CPI +10.1% vs +10.3% y/y expected
- Spain January final CPI +5.9% vs +5.8% y/y prelim
- Eurozone December trade balance -€8.8 billion vs -€12.5 billion expected
- Eurozone December industrial production -1.1% vs -0.8% m/m expected
- ECB's de Cos: Recent inflation data have been somewhat encouraging
- Deutsche Bank bumps up Fed terminal rate forecast to 5.6% from 5.1% previously
Markets:
- USD leads, AUD lags on the day
- European equities higher; S&P 500 futures down 0.1%
- US 10-year yields down 1 bps to 3.751%
- Gold down 1.0% to $1,835.88
- WTI crude down 0.8% to $78.63
- Bitcoin up 2.0% to $22,708
It was a relatively quiet session as markets continue to digest the landscape following the US CPI data release yesterday. For all the anticipation, the main event didn't really offer much to work with and I shared my thoughts here.
But the dollar held firmer across the board with risk sentiment keeping slightly lower on the balance of things. The greenback is seeing gains more prominent against the antipodeans, though the pound is also down significantly after UK inflation came in cooler than expected in January.
GBP/USD fell from 1.2135 to 1.2055 and is hovering at the lows for the day, down 0.8% currently. Meanwhile, EUR/USD is down 0.2% to 1.0710 and USD/JPY up 0.3% to 133.50 with the latter pushing to fresh highs in six weeks.
USD/CAD is also seen up 0.4% to near 1.3400 while AUD/USD is the major laggard, down 1.3% to 0.6895, and NZD/USD down 0.9% to 0.6275 on the day. It is pretty much a dollar wipeout against the commodity currencies amid the more subdued mood in risk.
US futures were down around 0.4% but have picked up in the last 15-20 minutes, owing to a sudden jump in periphery risk assets as noted here. Elsewhere, European equities remain extremely resilient though, defying the sluggish mood in Us futures to keep slightly higher across the board so far on the day.
Now, the focus turns towards the US retail sales data coming up later.
