Key Overnight Developments
- US Dollar Slumps vs Major Currencies in Thin Holiday-Week Trade
- Japanese Data Cautiously Improves But Rates Outlook Still Dismal
Critical Levels
CCY | SUPPORT | RESISTANCE |
EURUSD | 1.3152 | 1.3292 |
GBPUSD | 1.5404 | 1.5522 |
The Euro and the British Pound advanced in overnight trade, adding 0.5 and 0.2 percent respectively against the US Dollar as the greenback came under broad-based selling pressure (see below). We remain short EURUSD and long USDJPY.
Asia Session Highlights
CCY | GMT | EVENT | ACT | EXP | PREV |
JPY | 23:30 | Household Spending (YoY) (NOV) | -0.4% | 0.3% | -0.4% |
JPY | 23:30 | Job-To-Applicant Ratio (NOV) | 0.57 | 0.57 | 0.56 |
JPY | 23:30 | Jobless Rate (NOV) | 5.1% | 5.1% | 5.1% |
JPY | 23:30 | Tokyo Consumer Price Index (YoY) (DEC) | -0.2% | 0.1% | 0.2% |
JPY | 23:30 | Tokyo CPI Ex-Fresh Food (YoY) (DEC) | -0.4% | -0.4% | -0.5% |
JPY | 23:30 | Tokyo CPI Ex Food, Energy (YoY) (DEC) | -0.5% | -0.5% | -0.6% |
JPY | 23:30 | National Consumer Price Index (YoY) (NOV) | 0.1% | 0.1% | 0.2% |
JPY | 23:30 | National CPI Ex-Fresh Food (YoY) (NOV) | -0.5% | -0.6% | -0.6% |
JPY | 23:30 | National CPI Ex Food, Energy (YoY) (NOV) | -0.9% | -0.8% | -0.8% |
JPY | 23:50 | Industrial Production (MoM) (NOV P) | 1.0% | 0.9% | -2.0% |
JPY | 23:50 | Industrial Production (YoY) (NOV P) | 5.8% | 5.5% | 4.3% |
JPY | 23:50 | Retail Trade s.a. (MoM) (NOV) | 1.9% | 1.1% | -1.9% |
JPY | 23:50 | Retail Trade (YoY) (NOV) | 1.3% | 0.4% | -0.2% |
JPY | 23:50 | Large Retailers' Sales (NOV) | 0.2% | -0.3% | 0.4% |
JPY | 1:30 | Labor Cash Earnings (YoY) (NOV) | -0.2% | 0.6% | 0.5% (R-) |
CNY | 1:50 | Leading Index (NOV) | 101.58 | - | 101.57 |
The US Dollar slumped in overnight trade, down 0.5 percent on average against its major counterparts. Identifying a concrete catalyst behind the selloff has proven difficult, with much of the move likely owing to the volatility-amplifying effects of thin liquidity as traders turn their eyes way from the markets for the holiday period. Indeed, trading volumes on US Dollar Index futures have dropped dramatically, down 76.5 percent over the last two weeks.
Japanese economic data proved somewhat robust. Inflation managed to stay in positive territory for a second month in November, albeit at a slower pace, with the Consumer Price Index adding 0.1 percent from the previous year. Industrial Production topped expectations, with output rising 1 percent to post the largest monthly increase since April. Retail Trade figures also printed better than forecast, adding 1.9 percent in November to register the largest gain since January. Finally, the Jobless Rate held unchanged at 5.1 percent as expected in November. Still, the data is hardly robust enough to justify a fundamentally supported argument for a stronger Japanese Yen, with traders still pricing in near-zero interest rates for the coming year.
Euro Session: What to Expect
CCY | GMT | EVENT | EXP | PREV | IMPACT |
EUR | 6:30 | French Gross Domestic Product (QoQ) (3Q F) | 0.4% | 0.4% | Low |
EUR | 6:30 | French Gross Domestic Product (YoY) (3Q F) | 1.8% | 1.8% | Low |
CHF | 7:00 | UBS Consumption Indicator (NOV) | - | 1.716 | Medium |
The economic calendar is decidedly lackluster and risk sentiment looks indecisive with US stock index futures showing little conviction in late Asian trade. December’s US Consumer Confidence report due late into the session is the next significant inflection point, with expectations calling for the metric to rise to the highest in seven months.
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