EUROPEAN SENTIMENT INDICATORS CARRY WEIGHT ON MONDAY
A batch of European sentiment indicators will headline an otherwise quiet day of trade on Monday. The first full week of the year is expected to see a deluge of economic data, culminating in Chinese and US inflation figures.
Action begins at 07:00 GMT with a report on German factory orders. November bookings are expected to rise 0.8% month-on-month, following a gain of 0.5% the previous month.
Switzerland’s Federal Statistical Office will release official inflation figures at 08;15 GMT. The Consumer Price Index (CPI) is expected to come in at 0.8% year-over-year in December, unchanged from the previous month.
European sentiment data will be released at 10:00 GMT, including the Sentix investor confidence index.
Separately, the European Commission’s statistical agency will report on services sentiment, consumer confidence, industrial confidence, business climate and economic sentiment. All figures will be based on the month of December.
Data on Eurozone retail sales will also be released Monday.
In North America, the Bank of Canada will release its first Business Outlook Survey of 2018. The report provides an analysis of the nation’s economy through the eyes of business executives.
The only US report of note is consumer credit change for November. The Federal Reserve will issue the data at 20:00 GMT.
The US dollar rose slightly against a basket of currencies Monday. The DXY basket was last seen trading at 92.00. The greenback plunged toward four-month lows in the first week of 2018. Analysts say it could be a tough year for the US currency even as the economy shows signs of strengthening. The greenback is coming off its worst year since 2003.
Europe’s common currency traded comfortably above 1.2000 US on Monday, as the EUR/USD consolidated near four-month highs. The regional currency is benefitting from a stronger economic recovery and the gradual removal of policy accommodation by the European Central Bank (ECB). The EUR/USD was last seen trading at 1.2033 for a gain of 0.1%. Despite the upsurge, the pair faces a major resistance test around 1.2100.
Cable settled well off multi-month highs on Friday, but remains in a firm uptrend as traders continue disavowing the dollar. The GBP/USD exchange rate was last seen trading around 1.3570, where it was little changed compared to the previous close. The pair is seeing strong support at the psychological 1.3500 level. On the opposite side of the ledger, resistance is likely found at 1.3560.
The North American cross resumed its descent last week, with the USD/CAD falling to its lowest level since September. The pair was last seen trading just below 1.2400. Immediate support is located at 1.2350. If the greenback recovers, the 1.2570 region is likely the next resistance region.