January 12, 2018
- US Consumer Price Index data showed 2.1 percent year-on-year growth, as expected; the core iteration data (change in the price of goods and services purchased by consumers, excluding food and energy) showed a modest increase of 1.8 percent year-on-year growth.
- USD/CAD is steady this morning after this US data failed to offer a catalyst for a higher rate. Analysts are looking towards further guidance from the Bank of Canada meeting next week on January 17th.
- The euro moved to a three-year high this morning as investors heighten their expectations for further monetary tightening from the European Central Bank. Meeting minutes from the ECB’s December meeting showed that the Mario Draghi may revisit the Bank’s communication stance earlier than expected.
- The success of German Chancellor Angela Merkel’s deal to form a coalition government also pushed the multi-national currency higher; prospects of a stable German government are becoming more certain after Merkel’s conservatives moved closer to brokering a deal with Germany’s Social Democrats Party.
- The Chinese renminbi posted a rally higher this morning after falling sharply earlier this week. China’s trade balance showed a sizable surplus on exports versus imports, creating some worry over a slowing rate of growth for imports in the Chinese economy.
- Oil prices are set to record a 3% weekly gain despite pulling back from multi-year highs yesterday; oil market participants will watch the Baker Hughes US rig count to see if the number of active rigs rebounds from the decline of 747 to 742 seen last week.