Dollar Down, Investors Digest Surprise PBOC Benchmark Cut

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Dollar finds a footing as traders brace for hawkish Fed

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A hawkish hint from ECB Lagarde lifts Euro

The European Central Bank remains confident that inflation will come down this year but is prepared to adjust policy to meet its inflation target, ECB chief Christine Lagarde said on Friday."We understand that price increases are a concern for many and we take this concern very seriously," Lagarde said. Eurozone inflation hit 5% in December, more than double the central bank's target of 2%.“Our commitment to price stability remains unwavering,” the head of the regulator said. “We will take all necessary measures to ensure that our inflation target of 2% is achieved in the medium term.”

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/a-hawkish-hint-from-ecb-lagarde-lifts-euro"
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Britain's high street comes back from the dead

Creative destruction has wrought its magic on the high street and there are new signs of life in retail, says Matthew Lynn

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Lebanese central bank seeks to strengthen currency after slump

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Marketmind: Let's talk about sterling

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A word of caution from the World Bank risks spoiling bullish market sentiment

The World Bank on Tuesday trimmedforecasts for economic growth in the United States, the Eurozone and China and warned that high debt levels, rising income inequality and new strains of coronavirus threaten recovery in developing countries.Global growth in 2022 is expected to slow "significantly" to 4.1% from 5.5% a year earlier, and to 3.2% in 2023 due to pent-up demand fizzling out and fiscal and monetary policies becoming more austere.The World Bank cut its forecasts for 2021 and 2022 by 0.2 percentage points from June.The International Monetary Fund, which is to publish a new report on January 25, is likely to cut its growth forecasts as well.The World Bank pointed to a significant recovery in economic activity in advanced and emerging economies in 2021 after a slowdown in 2020, but warned that longer inflation, persistent supply chain problems and labor shortages, and new coronavirus variants are likely slow down global growth.Growth in advanced economies will slow to 3.8% in 2022 from 5% in 2021, and will be 2.3% in 2023, the report said. However, the World Bank expects that production and investment in these countries will still return to pre-pandemic levels by 2023.

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The charts that matter: growth stocks continue their slide

As the US tech stocks and the dollar fell further this week, here’s what happened to the charts that matter most to the global economy.

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What's driving the cost of living crisis?

Soaring bills, inflation and tax rises are about to squeeze household incomes. And it doesn’t seem that there is much the government can do about it.

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Tim Cook: the man who filled Steve Jobs’ shoes at Apple

No one expected much from Tim Cook when he took over the top job on the Apple founder’s death. But he has quietly led the firm to extraordinary new heights.

from Moneyweek RSS Feed https://moneyweek.com/economy/people/604334/tim-cook-profile
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Energy prices will keep rising – here’s how to invest

Energy prices will keep rising for the foreseeable future – it is a simple matter of supply and demand. Merryn Somerset Webb explains how you should invest to take advantage.

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Cryptocurrency roundup: bitcoin continues to slide as Lords say no need for a digital pound

Saloni Sardana looks at the cryptocurrency stories that caught our eye this week.

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Live Analysis – US Retail Sales & Weekly Wrap

The US Dollar headed lower following the data, which saw retail sales plunge, and import prices fall.US retail sales plunged -1.9% in December and dropped -2.3% excluding autos, much weaker than expected. Those follows November’s 0.2% (was 0.3%) headline rise and the 0.1% (was 0.3%) gain in the core after strong 1.8% jumps in October sales. Sales excluding autos, gas and building materials dropped -2.7% from -0.4% (was 0.1%). Many of the components weakened on the month with some big revisions to November.

Access our Economic Calendar

Stuart Cowell  

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Events to Look Out for Next Week

Welcome to our weekly agenda, our briefing of all the key financial events globally. Inflation pressures and virus developments remain in focus. Energy prices continue to surge across world and will likely see headline rates continue to rise. Central bankers clearly are getting nervous and worried about the risk of second round effects, especially if Omicron and vaccination schedules really mean the end of the pandemic phase of Covid-19.  The week ahead is expected to be a massive one from a data perspective as Inflation, GDP and Retail Sales data and BoJ meeting will be the highlights for next week.

Monday – 17 January 2022

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• Gross Domestic Product (CNY, GMT 02:00) – GDP is the economy’s most important figure. Q4’s GDP is expected to slowdown at 3.6% y/y from 4.9% y/y.

Tuesday – 18 January 2022

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• Interest Rate Decision, Monetary Policy Statement & Outlook Report (JPY, GMT 03:00) –  The BoJ sits on its ZIRP policy for the foreseeable future. The Bank is set to taper corporate debt purchases to pre-pandemic levels and the emergency funding scheme scaled back once the March 2022 deadline is reached. Loan assistance for smaller businesses was extended another six months, while support for larger firms will be gradually scaled back from April. A very limited move towards normalization that leaves the BoJ far behind the Fed and failed to instill much confidence in markets.
• Employment change & ILO rate (GBP, GMT 07:00) – UK the labour market looks increasingly tight with many companies struggling to find skilled staff. Reports suggest that pay bargaining across major private and public sector employers was relatively low through much of last year, likely also owing to the crisis situation. UK Earnings with the bonus-included figure were at 4.9% (3 mo/y) in the three months to November. The UK ILO unemployment rate is at 4.2%.
• Economic Sentiment (EUR, GMT 10:00) – German January ZEW economic sentiment is expected to have rise to 32.0 compared to 29.9 in December.

Wednesday – 19 January 2022

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• Consumer Price Index (GBP, GMT 07:00) –That UK inflation is above target and will move up further with the official December readings out next week, is pretty clear. But the extent of price increases very much depends on which number one focuses, with a huge difference between the measures most frequently cited and used to incorporate cost of living changes in things like pension adjustments, charges for student loans and others. Unions still cling to the RPI as the “best measure” and that already stood at 7.1% in November, far above the CPI reading, which was “just” 4.6%. With the labour market looking increasingly tight, that adds to the risk of second round inflation effects.
• Housing Stats & Building Permits (USD, GMT 13:30) – Housing starts are expected to ease to a 1.660 mln pace in December from rates of 1.679 mln in November and 1.502 mln in October, versus a 15-year high of 1.725 mln in March. Permits are expected to sit at 1.710 mln, versus 1.712 mln in November and a 15-year high of 1.883 mln in January.
• Consumer Price Index and Core (CAD, GMT 13:30) – Canada’s CPI was steady at a 4.7% (y/y, nsa) pace in November from the 4.7% growth rate in October. CPI grew 0.2% (m/m, nsa) after the 0.7% gain in October. The average of the BoC’s three core CPI measures was 2.7% in November (y/y, nsa), unchanged from October. Both the total and core measures were in-line with expectations.
• BOE Governor Bailey Speech (GBP, GMT 14:15)

Thursday – 20 January 2022

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• Employment Change (AUD, GMT 00:30) – Australian labor market expected to show a change to 30K employed people for December. The december unemployment rate is expected to decline slightly at 4.5% m/m from 4.6%.
• Consumer Price Index and Core (EUR, GMT 10:00) – HICP inflation ended 2021 at 5.0% y/y, up from 4.9% y/y in November and hitting the highest since the start of the seriesHeadline inflation rates in the Eurozone for December are expected unchanged. At the moment there is a a slight correction at the 4.9% y/y with core at 2.6% y/y.
• ECB Monetary Policy Meeting Accounts (EUR, GMT 12:30) – The ECB Monetary Policy Meeting Accounts provide information with regards to the policymakers’ rationale behind their decisions. The official line remains that a rate hike this year is very unlikely. Nevertheless, the fact that the central bank still adds net asset purchases for most of this year means there now is the risk of a more permanent inflation overshoot that could undermine confidence in the central bank’s inflation fighting credentials. At the same time, keeping spread in remains a key policy objective and that will increasingly test the ECB’s resolve this year and likely see the hawks getting more vocal.
• Philadelphia Index (USD, GMT 13:30) – The Philly Fed index is seen rising to 19.0 in January after a big drop to 15.4 in December.
• BoJ Monetary Policy Meeting Minutes (JPY, GMT 23:50) – The BoJ minutes should provide further guidance for 2022.

Friday – 21 January 2022

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• Retail Sales (GBP, GMT 06:00) – The Retail Sales are seen a slowdown at 0.8% m/m for December from 1.4% m/m with the core lower at 0.8% from 1.1% m/m last month.
• Retail Sales (CAD, GMT 13:30) – The Retail Sales are seen at -0.5% December decline for the headline and -0.3% for the ex-auto measure, after November increases of 0.3% for both. The headline should be restrained by both a pull-ahead of holiday sales into early-Q4 due to feared supply shortages, and a headwind to holiday activity from the Omicron variant.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /302059/
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