U.S. Session Recap – December 18, 2013

  • U.S. core CPI better than expected at 0.2%, headline CPI flat
  • Canadian manufacturing sales post surprise 1.0% increase vs. estimated -0.2%
  • BOE Governor Carney hints at an end to QE
  • New Zealand prints larger than expected deficit of 4.78B NZD
  • Japanese trade balance falls short of consensus at -1.35T JPY
  • More jawboning from RBA Governor Stevens

The Greenback flexed its muscles during the New York session, despite mixed inflation reports from the U.S. economy. The core CPI came in better than expected with a 0.2% increase while the headline figure came in flat instead of showing the estimated 0.1% uptick. U.S. current account was slightly better than expected at a deficit of 95 billion USD versus the projected 101 billion USD shortfall and the previous 97 billion USD deficit.

Meanwhile, BOE Governor Carney gave the pound a bit of a boost when he spoke of reaching the end of QE, assuming that there are no additional economic shocks. However, the pound was unable to hold on to its gains for the rest of the trading session. Canada also saw strong data in the form of its manufacturing sales report, which printed a surprise 1.0% jump instead of the expected 0.2% decline, but the Loonie was unable to draw enough support.

The Asian session was off to an exciting start, as New Zealand printed a weaker than expected current account balance while Japan reported a worse than expected trade deficit. RBA Governor Stevens also added to the excitement, when he resumed jawboning the Australian dollar yet again. He said that intervention can be useful at times and that the RBA actually considered meddling in the forex market recently.

No other major reports are lined up for the rest of the Asian session so be on the lookout for potential consolidation ahead of the upcoming FOMC statement!

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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