USD’s rally takes a pause, while riskier assets are modestly rising.
Important events this week will bring us
American and British consumer prices
The market awaits the US consumer prices on Tuesday at 15:30 MT time (12:30 GMT) and the British CPI on Wednesday at 11:30 MT time (9:30 GMT). No major surprises are expected by analysts: while the American headline and core CPIs are anticipated to advance by 0.2%, the British consumer price index may reach the same level as during the previous release, showing the increase by 1.5%. As usual, higher-than-expected figures will bring positive momentum to the USD.
In the end, it needs a sign
Donald Trump plans to meet with the Chinese side on Wednesday, where he is going to sign the “phase one trade deal”. Despite the optimism on the agreement, the details of the document have still not been announced and reportedly remain under review. We expect the comments by both sides and the final details of the deal. As it may fail to meet the market’s expectations, Wednesday’s trade will largely depend on the risk sentiment.
The risk may also be affected by the US-Iran tensions after the latter admitted it shot down a Ukrainian airliner by mistake.
Retail sales of the US
The week will be highlighted by yet another important indicators for the United States, which are retail sales and core retail sales. The indicators will be published on Thursday at 15:30 MT (12:30 GMT). Analysts are optimistic in their forecasts; both headline and core indicators are anticipated to rise by 0.5% and 0.3% accordingly.
Earning reports by the US banks
This will be the first earnings week of 2020 with Citigroup and JPMorgan releasing their financial results on Tuesday and Alcoa with the Bank of America on Wednesday. While JP Morgan is forecast to release the revenue of $27.96 billion and EPS equaled 2.37, experts suggest Citigroup posting EPS of 1.86 and the revenue of $73.9 billion. At the same time, the earnings of Alcoa are expected to decline, with a revenue of $2.48 billion and EPS of -0.21.
Exotic currencies are under the spotlight
The Bank of Turkey and the South African Reserve banks will hold their meetings on Thursday. The decisions by the regulators may affect the TRY and the ZAR.
We are now past the middle of January, and this means that the largest US companies will report their earnings for the fourth quarter and many of them will provide the results of the entire 2020.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
PMI reports from the EU, the UK, and the USA will be released during the day!
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Jump in to know the key market events and trading ideas for this week!