Economic data coming up in the European session

Author: Justin Low | Category: News

UK and Eurozone CPI figures on the agenda

The dollar is keeping weaker across the board as risk keeps steadier following a more positive return from Wall St yesterday after the long weekend.

The reflation narrative appears to be taking a breather as we approach some consolidation and the dollar is losing some of its recent tailwind from higher yields.

EUR/USD is climbing back towards its 200-hour moving average @ 1.2148 as buyers look to try and seize near-term control, with AUD/USD also in a similar spot as price action moves up to test the confluence of its key hourly moving averages @ 0.7719-28.

In short, the recent dollar momentum is being called into question as a breach of the near-term levels will suggest that dollar sellers are beginning to take charge again.

Elsewhere, USD/CAD has also broken back below its key hourly moving averages of 1.2719-25 with USD/JPY also seeing a similar break below the region of 103.83-91. The latter remains capped by key resistance trendlines closer to 104.00 still.

Looking ahead, the market is slowly settling into a bit of a pause in the recent reflation narrative with 10-year Treasury yields keeping a hold above 1% but not really threatening to break much higher just yet.

That leaves some room for consolidation in the bond market and will keep a bit of a push and pull in FX, with dollar sellers coming back into the picture now.

Equities are still keeping steadier for the most part with tech stocks benefiting the most yesterday, considering that the Fed put continues to stay in play.

0700 GMT - Germany December PPI figures
Prior release can be found here. A proxy and lagging indicator of inflation pressures in the German economy. A minor data point.

0700 GMT - UK December CPI figures
0700 GMT - UK December PPI figures
Prior release can be found here. UK inflation is estimated to creep up a little last month but overall keep more subdued in the bigger picture of things. The good news is that this won't force the BOE's hand but it still leaves a lot to be desired for the central bank to stop worrying about future developments in this space in the new year.

1000 GMT - Eurozone December final CPI figures
The preliminary report can be found here. As this is the final reading, it shouldn't do much but reaffirm the more subdued price pressures towards the end of last year.

1200 GMT - US MBA mortgage applications w.e. 15 January
Weekly US housing data, measures the change in number of applications for mortgages backed by the MBA during the week. The focus will once again be on purchases as that has been one of the more bullish spots outlining that US economic conditions are not as dire as first suggested by the recent dip due to the coronavirus impact.

That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

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