Asian markets have not pushed the EUR’s rebound seen in the European and US sessions Thursday. There were no data releases and given it is a US holiday Monday, trading ranges were very tight. And perhaps superstitious participants noted it was Friday the 13th!
The EUR staged a comeback Thursday as more positive inputs from Europe and a weak set of US data saw the single currency rallying, for a change, through January highs. Spanish and Italian bond auctions saw solid demand, while an ECB’s no-change stance along with some more positive comments from Draghi in the press conference saw the EUR begin a short squeeze of over-stretched short positions. Draghi saw “tentative signs” of economic stabilisation, albeit at low levels, noting that the recent 3-year LTRO facility was helping to stabilise the banking system, while adding that the SMP will remain active.
GBP tracked the EUR as the Bank of England also kept everything unchanged but weak industrial production data and disappointing results from retailer Tesco reignited the focus on the next phase of quantitative easing down the road. The NIESR GDP estimate showed growth slowing to just 0.1 percent from 0.3 percent in December.
US retail sales were a disappointment in December with headline sales rising a dismal 0.1percent and core sales (ex-autos) unexpectedly falling 0.2 percent, despite anecdotal evidence of a busy shopping period. Jobless claims were also higher, edging back towards the 400k mark and hit a 6-week high of 399k, with a mild upward revision to last week’s data adding to the gloom. The weekly consumer comfort index was barely changed at -44.7 while business inventories rose just 0.3 percent compared to 0.8 percent the previous month. Despite the weak data, Wall St saw more comfort in the better mood out of Europe and rallied for the fourth day in a row – DJIA rose 0.17 percent, S&P 0.23 percent and the Nasdaq +0.51 percent.
Have a great weekend, a long one for the US.
Data Highlights
CA Nov. New Housing Prices out at +0.3% m/m, +2.5% y/y vs. 0.2%/2.4% expected and 0.2%/2.5% prior resp.
US Dec. Advance Retail Sales out at +0.1% vs. 0.3% expected and revised 0.4% prior
US Dec. Retail Sales ex-Gas out at -0.2% vs. +0.3% expected and revised +0.3% prior
US Initial Jobless Claims out at 399k vs. 375k expected and revised 375k prior
US Continuing Claims out at 3628k vs. 3595k expected and revised 3609k prior
US Bloomberg Consumer Comfort Index out at -44.7 vs. -44.8 prior
US Nov. Business Inventories out at +0.3% vs. 0.4% expected and 0.8% prior
UK Dec. NIESR GDP Estimate out at +0.1% vs. 0.3% prior
US Dec. Monthly Budget out at -$86.0 bln vs. -$83.7 bln expected and -$78.1 bln prior
JP Dec. M3 Money Stock out at +2.6% y/y vs. 2.5% expected and 2.5% prior
Upcoming Economic Calendar Highlights
(All Times GMT)
SI Retail Sales (0500)
Norway Existing Homes (0900)
UK PPI Input/Output (0930)
EU Euro-zone Trade Balance (1000)
CA Int’l Merchandise Trade (1330)
US Import Price Index (1330)
US Trade Balance (1330)
US Michigan Confidence (1455)
US Fed’s Duke to speak (1610)
US Fed’s Lacker to speak (1745)
US Fed’s Evans to speak (1800)
US Fed’s Bullard to speak (1815)
Andrew Robinson,
SAXO BANK