Forex - Chile Flows: CLP starts the day stronger below 640, catching up with yesterday afternoon gains


 11:44 (GMT) 15 Feb

  [Forex Flows]

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Chile Flows: CLP starts the day stronger below 640, catching up with yesterday afternoon gains (0100-LGJF-C01)

CLP is starting the day stronger by 0.34% to 639.50, catching up with yesterday afternoon gains in the region as trading in the currency closes very early as compared to peers. Global backdrop is hardly supporting and we may not see more gains from current levels unless US data comes on the softer side. There is marginal reaction from yesterday BCCH decision, because the monetary authority, while not cutting rates, sent a strong guideline that a rate cut is near. We have no more data or events in the week.

In the US, we have plenty of data to watch. Jan CPI should rise by 0.4% on the month, with ex food and energy gains of 0.2% for PPI and 0.3% for CPI. Core CPI merits particular attention as prices often see bounces in the New Year and input costs have risen recently. A 0.3% rise would leave yr/yr growth stable, a lack of a bounce would see yr/yr growth dip but a strong bounce would mean risk of core PCE prices reaching 2.0% earlier than expected. The number could have a significant impact on Fed policy risks. The CPI will compete with another significant release for attention, Jan retail sales, where we expect a flat figure overall but a solid 0.5% gain ex autos, 0.4% ex autos and gasoline. Feb's Empire State survey is due at the same time, with Feb's Philly Fed following on Thursday. Shortly after the CPI Jan industrial production will be released on Wednesday, and should show an improved 0.4% rise in manufacturing output, though we expect overall industrial production to be restrained to unchanged by a correction in utilities.


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