Two big US data points could bring relief for today’s dollar selling

It’s all about the data this afternoon as we get the latest news on inflation and the fortunes of the US consumer. Here’s the numbers first

CPI (Dec 2017)

  • CPI 2.1% exp vs 2.2% prior y/y
  • Core 1.7% exp vs 1.7% prior
  • Real average weekly earnings 0.1% exp vs 0.1% prior m/m
  • 0.8% prior y/y
  • Real average hourly earnings 0.2% prior y/y

Retail sales

  • 0.4% exp vs 0.8% prior m/m
  • Ex-autos 0.4% vs 1.0% prior m/m
  • Ex-gas/autos 0.8% prior m/m
  • Control group (core) 0.4% exp vs 0.8% prior m/m

Here’s the deja vu. When I do these mini previews I look up the old posts to familiarise myself with what happend then. This was my headline ahead of last month’s numbers Can the upcoming US retail sales and CPI reports change the tide for USDJPY?

My view today pretty much mirrors what I wrote last month;

What’s on my mind is how we match the data against today’s FX moves. USDJPY seems under constant pressure and bad numbers could be the straw that breaks the camels back. On the other side, will good numbers bring a complete about change or will it be seen by sellers as an opportunity to hit a rally?

That’s pretty much what I was going to write today, so that’s saved me some typing.

I’ll even C&P my view on the reaction and just amend the levels;

On balance, I see a greater chance of USDJPY falling and/or being sold on a rally, than I do seeing these intraday moves turning around completely. At best it might put a temporary floor in but if any rally can’t break above 113.25 111.40, and more importantly 111.80/90, it will be in trouble.

As always, look for a 2pp varitation in CPI to gauge the size of any moves (less than 2pp smaller move, 2pp or over, bigger move). Retail sales can be a wild card so judge CPI first before retails.

Probably the easiest preivew I’ve ever done. Same again next month? 😉

Ryan Littlestone

Psychedelic chartist extraordinaire. Have your shades ready.
Philosophy: “Don’t be a Dick for a tick”

Read how Ryan got into trading here
Ryan Littlestone

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