Retail Sales in the UK has beaten expectations and soared to its strongest pace in over nine years. The Office for National Statistics reported that retail sales have jumped 2.6 percent in December, amounting to a year-on-year estimate of 5.3 percent, aided by improved sales in smaller stores. This was compared to analysts’ forecast of just 0.4 percent.
In the United States, the Philly Fed Manufacturing Index and Empire State Manufacturing Index surpassed their respective expectations. The former came in at 9.4, while the latter jumped to 12.5 which was nearly 4 times higher than expectations. Meanwhile, the Preliminary University of Michigan Consumer Sentiment slid to 80.4 from 82.5.
In other news, Australia’s Employment Change surprised with a reading of minus 22,600, compared to the forecast for a 10,300 gain. The Unemployment Rate stood at 5.8 percent.
In Japan, Core Machinery Orders jumped 9.3 percent in November, its best reading in the last 6 months.
Gold is chugging along well and has now clinched its third consecutive bullish week. Price closed the week just above $1,250 but there are evidently more wood to chop until at least $1,350. $1,200-30 should provide support to keep the upside momentum going.
Oil made a strong rebound this week and price was able to close the week just above the critical $94 level. The next step is to take out the resistance surrounding the $98-$101 area.
The upmove last week in EURUSD now appears to be a break from the ongoing slide in this pair. The weakness in EUR crosses helped drag this pair even lower, and EURUSD closed the week at 1.3540. This is a serious situation, and technically, the pair should make a strong rebound next week, otherwise bear will look for 1.3000-1.3300.
GBPUSD soared almost 150 pips on Friday but apparently this was not enough to change the course of this pair this week. Price closed the week just above the middle of the weekly range at 1.6422. There are tons of resistances from 1.6500 and higher. Bulls can take these out if Retail Sales-led momentum flows through the coming weeks.
USDJPY had a rough start to the week, but eventually JPY weakness prevailed and the pair closed the week at 104.30. Now, price is back at challenging the 105 highs which have been a headache to buyers since late-December. We can expect another test of either side of price in the coming week.
The Week Ahead
Monday will have very few economic releases to watch out for, such as China’s GDP, Industrial Production, Fixed Asset Investment, and Retail Sales; Germany’s PPI, Bundesbank Monthly Report.
On Tuesday, there will be New Zealand’s CPI; German ZEW Economic Sentiment; Spain’s HPI; UK CBI Industrial Order Expectations; Canada’s Manufacturing Sales and Wholesale Sales.
Wednesday will be busy as usual with news namely, Australia’s CPI; BOJ’s Monetary Policy Statement and Press Conference; UK Claimant Count Change, Unemployment Rate, MPC Asset Purchase Facility and Official Bank Rate Votes; Bank of Canada Overnight Rate Announcement, Rate Statement, Press Conference, and Monetary Policy Report. Today is also day 1 of the 4-day World Economic Forum annual meetings.
Thursday is just as busy with Business NZ Manufacturing Index; Australia’s MI inflation Expectations; China’s HSBC Flash Manufacturing PMI; Euro-area, France, and Germany Flash Manufacturing PMI and Services PMI; Spain’s Unemployment Rate; Eurozone Current Account; Canada’s Retail Sales; US Jobless Claims, Flash Manufacturing PMI, Existing Home Sales.
Friday’s Asian session is pretty much quiet. Focus will be on UK BBA Mortgage Approvals; Canada’s CPI.