Article Highlights

  • U.K. BRC retail sales monitor (y/y) up by 1.0% in December vs. 0.6% uptick in November
  • AU retail sales inches 0.2% higher in November vs. 0.4% expected, 0.5% previous
  • China’s CPI (y/y) rises by 2.1% vs. 2.2% expected, 2.3% previous
  • China’s PPI (y/y) jumps by 5.5% vs. 4.6% expected, 3.3% previous
  • Japan’s consumer confidence up from 40.9 to 43.1 vs. 41.3 expected in December
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The dollar lost more pips to its major counterparts, as a lack of fresh catalysts inspired profit-taking ahead of Trump’s inauguration.

Major Events:

China’s CPI and PPI releasesConsumer prices in China jumped up by 2.1% from a year earlier in December, which is just under the 2.3% increase in November and the expected 2.2% expected reading. However, on a monthly basis, inflation rose by 0.2% for the month, a bit higher than the 0.1% uptick in November.

It’s the producer price index (PPI) that caught the investors’ attention though, as it clocked in a whopping 5.5% growth from a year ago in December, much higher than November’s 3.3% jump and the expected 4.6% increase. Oh, and did I mention that it’s the fastest growth rate since September 2011? On a monthly basis, factory-gate prices rose by 1.6%, still a bit higher than November’s 1.5% growth.

A closer look tells us that much of the price increases came from higher commodity prices although a weak yuan also didn’t hurt. Overall, market players were pretty happy with the releases, as price increases in the past couple of months suggest shifts in year-long downtrends.

Australia’s retail sales – Australian consumers tightened their purse strings in November after makin’ it rain in the last three months. Data from the Australian Bureau of Statistics (ABS) reflected retail sales inching only 0.2% higher in November when analysts had been expecting a 0.4% uptick.

The 0.2% growth is the weakest since July, as sales improved at a slower pace for food retailing (from 0.6% to 0.4%) and household goods retailing (from 0.7% to 0.2%). Meanwhile, sales also fell for cafes, restaurants, and takeaway food services (from 0.4% to -0.8%) and other retailing (from 0.8% to -0.1%).

Still, November’s increase marks the fourth consecutive positive month for retail sales. And, taken together with October’s progress, is still about 1.5% faster than the first two months of Q3 2016 when consumer spending actually dragged the GDP lower.

Aussie bulls mostly shrugged off the disappointing headline numbers in favor of its upside contribution to the quarterly figures. If you recall, Australia registered a negative GDP in Q3. The prospect of consumer spending contributing to growth in Q4 kept the Aussie afloat during the session.

Major Market Movers:

USD – The dollar lost a couple more pips to its counterparts, as Asian session traders took more profits from their long dollar trades ahead of Trump’s presser tomorrow and his inauguration on the 20th.

EUR/USD is up by 38 pips (+0.36%) to 1.0615, USD/JPY dropped by 72 pips (-0.62%) to 115.34, and USD/CHF slid by 27 pips (-0.27%) to 1.0118.

AUD – The Aussie had a good trading session against its major counterparts, as the positive impact of November’s retail sales numbers on the consumer spending portion of the GDP gave hopes that the Land Down Under would avoid a technical recession.

AUD/USD shot up by 19 pips (+0.26%) to .7379, EUR/AUD slipped from its 1.4427 session high to trade at 1.4386, and AUD/NZD crawled back up to 1.0484 after dipping to a low of 1.0464.

Watch Out For:

  • 7:45 am GMT: Switzerland’s unemployment rate expected to remain at 3.3%
  • 8:45 am GMT: French industrial production (0.5% expected, -0.2% previous)

See also:

U.S. Session Recap
London Session Recap

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