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ECB President Lagarde sticks to hawkish tone on rate hikes in Davos. The Japanese Yen pulled back on Friday after JGB yields tanked below the central bank’s ceiling. Retail spending in the UK nose-dived even as inflation remains on higher grounds signalling a slowdown in the country. Central bank members continue speaking at the annual meeting in Davos.
USDJPY steadily soared above 129.00 as the Yen retreated following Japanese yields slide to below BoJ’s cap. Earlier in the Asian session, the Japanese National Core CPI [YoY] rose to 4.0% in December. The housing sector in the US witnessed less demand in December as shown by a decline in Building Permits at 1.330 million vs 1.351 million in the previous month. Jobless claims however came in at 192K against the 214K anticipated. Traders now look to the release of existing home sales in the US. The pair was up +0.81% and may seek to revisit 130.00 and 131.50 in the near term.
EURGBP appreciated by +0.44% as disappointing economic data pulls the sterling down. Early European session, UK retail sales came in worse than anticipated with the month-on-month reading slumping to -1.0% from -0.5% and the core figures falling to -1.1% [MoM] and -6.1% year-over-year. The Euro continues to build on the ECB members’ hawkish tone seen in the published monetary policy account on Thursday. Also helping the Euro is upbeat German Producer prices for December which rose to 21.6% vs 20.8 expected YoY and -0.4% vs -1.2% MoM. The pair`s intraday low resides at 0.8740 while upside momentum may be challenged by 0.8800.
CADCHF firmed up by +0.38% above 0.6800 ahead of Canada’s retail sales data. Retail sales in the country are expected to have dropped in December following in the footsteps of wholesale sales that fell significantly to 0.5% from 1.9%. Swiss National Bank Chair Thomas Jordan committed to remaining on the rate hike course until inflation cools down. Further up buyers may be capped by 0.6880.
European stocks were mixed following mixed economic data from the euro area. The FTSE100 edged lower by -0.12% as slowdown concerns mount after worse retail sales. Bearish targets may be seen at 7725 and 7650. CAC40 trades between 7013 and 6963 at +0.01% as sellers may target 6800. German40 was down -0.12% from 15027 and may extend its slide to 14700.
US stock futures traded lower to end the week on a stronger dollar. Nasdaq100 futures were flat at +0.06% as bulls got capped by 11360 on the day. US30 futures extended their drop by -0.13% after a rejection at 33200 on Thursday. Sellers may need to breach 32800 lows for an extended leg lower. US500 futures were down -0.10% and sliding towards 3875 lows.
Elsewhere in Crypto, Bitcoin moved below 21K on the day even as bulls fight to keep the line and above. The rally comes after two months of struggling to rise above $17000. A number above $22800 would be key for a strong bullish momentum.
