U.S. Session Forex Recap – Feb. 15, 2016

  • U.S. Jan headline retail sales up by 0.2% vs. 0.1% forecast
  • U.S. Jan core retail sales up by 0.1% vs. 0.0% forecast
  • U.S. import prices fell by 1.1% in Jan vs. estimated 1.4% drop
  • U.S. UoM consumer sentiment index down from 92.0 to 90.7 in Feb
  • Japanese preliminary Q4 2015 GDP at -0.4% vs. -0.3% forecast

Thanks to upbeat retail sales data and a bit of profit-taking, the U.S. dollar was able to rebound against its forex counterparts on Friday.

Major Events:

U.S. data mostly stronger than expected – The January retail sales report printed better than expected results, as it indicated a 0.2% gain for the headline figure versus the projected 0.1% uptick while the core version showed a 0.1% increase instead of staying flat. To top it off, the previous month’s readings were revised from -0.1% to +0.2% for the headline figure and from -0.1% to +0.1% fore the core version.

U.S. import prices showed a 1.1% decline for January, possibly weighing on overall consumer price levels down the line, but this was better than the projected 1.4% slump. However, the UoM consumer sentiment index revealed that Americans aren’t too confident with their economic outlook, as the reading fell to 90.7 from a downgraded 92.0 figure.

More signs of an OPEC compromise  – Are they really ready to cut production this time? Word through the crude oil pipeline is that there is a growing consensus among several oil cartel members to do something to boost prices, with most OPEC nations already reeling from the non-stop drop in profitability.

Last time I checked, Saudi Arabia has clarified that they would agree to trim their production levels only if other non-OPEC nations do so. Venezuela has proposed to freeze new oil production to allow prices to recover for a bit, but other member nations such as Qatar said that they’ll still think about it and meet again this week. Stay tuned.

Major Currency Movers:

CAD – The Loonie had newfound strength on talks of an oil production cut among OPEC nations, as the oil-related currency advanced across the forex board.

USD/CAD tumbled from a high of 1.3962 to a low of 1.3813, CAD/JPY bounced off its previous lows around 79.32 to end at 81.80, EUR/CAD fell to a low of 1.5501, and GBP/CAD tested the 2.0000 handle once more.

JPY – The Japanese yen weakened for another day, as a pickup in risk appetite and profit-taking activity allowed its counterparts to rebound. It didn’t help the yen that Japan’s preliminary Q4 GDP missed expectations.

USD/JPY recovered to the 113.50 minor psychological mark, EUR/JPY bounced off 126.75 to close at 127.46, GBP/JPY climbed to a high of 165.09, and AUD/JPY rallied close to the 81.00 major psychological resistance.

Watch Out For:

  • Tentative: Chinese trade balance (389B CNY expected, 382B CNY previous)
  • Tentative: BOJ Governor Kuroda’s speech in parliament (Watch out for surprise comments since this testimony was just newly scheduled!)
  • 4:30 am GMT: Japanese revised industrial production (upgrade from -1.4% to -1.3% expected)
  • 4:30 am GMT: Japanese tertiary industry activity index (0.1% expected, -0.8% previous)

See more:

Asian Session Recap

London Session Recap

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