US economy leans towards an inflation
US consumer prices exceeded forecast while retail prices fell as housing starts recover, indicating a rise in inflation. The eurozone’s GDP grew in line with forecast. Britain leans towards an inflation, based on its consumer report. UK’s retail prices retained its good momentum.
US consumer prices grew 0.5 per cent in January while core prices, excluding food and energies, gained 0.3 per cent on a monthly basis. Retail prices slid 0.3 per cent and core prices, excluding automobiles, was flat in January.
US jobless claims expanded to 230,000 for the week ended February 10. Industrial production slid 0.1 per cent in January which was the worst in five months. Producer prices grew 0.4 per cent and core prices, excluding food and energy, also gained 0.4 per cent.
US building permit rose 1.4 million in January. Housing starts gained 1.33 million, both data were above forecast and indicate inflation growth.
Japan’s producer prices rose 2.7 per cent in January on a yearly basis, matching forecast. Preliminary GDP for final quarter grew 0.1 per cent.
Eurozone industrial production, including utilities and mines, gained 0.4 per cent in December. GDP for final quarter seasons grew 0.6 per cent.
British consumer prices grew three per cent in January on a yearly basis, beating forecast. Producer prices rose 0.7 per cent from a year ago, higher than 0.6 per cent recorded in January.
UK retail sales rose 0.1 per cent in in January after the previous month’s revised minus 1.4 per cent. Retail prices rose 0.4 per cent from a year ago. Technical forecast US dollar/Japanese yen showed bear trend on the weekly chart. This week, we reckoned the market might conduct a upward retracement for short-term consolidation. Resistance could be at 107.50 area while support could be at 105 level. Overall, the trend is leaning towards bearish sentiments in the coming weeks.
Euro/US dollar is trapped in a sideways pattern from 1.22 to 1.255 region. This week, it is important to observe the dollar’s trend because an unexpected weakening in greenback value will spike the euro higher after piercing above 1.25 resistance. However, we are still uncertain until the trend breaks beyond either directions.
British pound/US dollar has met strong resistance at the 1.41 to 1.415 region that will stay consistent this week. This week, the trend might fall and test the 1.375 support as traders adjust their position in mixed sentiments. Either direction is possible in the market due to uncertainties in the market while traders are advised to trade with controlled risk.
Disclaimer: This article is written for general information only. No liability by the writer, publisher or any third party involved in the distribution of this work. Dar Wong is a registered fund manager in Singapore with 29 years of global trading experiences. You may reach him at dar@pwforex.com.