U.S. Session Forex Recap – Dec. 14, 2015

  • U.S. Nov headline retail sales up by 0.2% as expected
  • U.S. core retail sales up by 0.4% vs. 0.3% forecast
  • U.S. Nov headline PPI up by 0.3% instead of staying flat
  • U.S. core PPI up by 0.3% vs. 0.2% estimate
  • U.S. preliminary UoM consumer sentiment index up from 91.3 to 91.8
  • Global equity indices weighed down by energy shares

Forex market players squeezed in a few big moves before the closing bell on Friday, with several investors booking profits ahead of this week’s top-tier events. Risk aversion also reared its ugly head back in the financial markets, as the commodity carnage seems to be far from over.

Major Events:

Strong U.S. reports – Data from the U.S. economy came in mostly stronger than expected, strengthening the odds of a Fed rate hike later this week. Headline retail sales rose by 0.2% as expected while the core version of the report showed a 0.4% gain, higher than the projected 0.3% increase. Consumer confidence also improved slightly, as the index measured by the University of Michigan climbed from 91.3 to 91.8 in December to chalk up its fourth consecutive monthly rise.

Meanwhile, headline producer prices posted a 0.3% uptick instead of staying flat while the core PPI picked up by 0.3% versus the estimated 0.2% gain. Keep in mind, however, that this hasn’t taken the recent commodity price slump into account yet.

Oil drops… again! – After taking a breather for a few trading sessions, crude oil resumed its slide once more when the International Energy Agency reported that world oil markets will remain oversupplied until the end of next year. And on the other side of the curve, demand is expected to fall from 1.8 million barrels per day this year to just 1.2 million barrels per day in 2016.

The institution also confirmed that the OPEC seems set on keeping things this way until the competition from other oil producers seeking to get a slice of the pie (Looking at you, Uncle Sam!) is effectively driven out.

WTI crude oil is trading below $36/barrel and Brent crude oil broke below $38/barrel, hitting levels not seen since Flo Rida’s debut single featuring T-Pain topped the Billboard charts in 2008. I’m talking ’bout low, low, low, low…

Major Currency Movers:

Commodity currencies – Thanks to yet another oil price tumble, the Loonie got battered by its forex rivals once more, dragging its comdoll buddies into the bloodbath as well.

USD – Although the Greenback was able to take advantage of the commodity carnage, it still ended up in a weak spot against its other forex counterparts, as U.S. stock indices were hurt by falling energy shares.

Watch Out For:

  • 12:50 pm GMT: Japanese Tankan manufacturing index (11 expected, 12 previous)
  • 12:5o pm GMT: Japanese Tankan non-manu index (23 expected, 25 previous)
  • 5:30 am GMT: Japan’s revised industrial production reading (1.4% expected)
  • 5:30 am GMT: Japanese tertiary industry activity (0.5% expected, -0.4% previous)

See more:

Asian Session Recap

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

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