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.

Forex - Brazil Flows: BRL opens 0.1% stronger on on China's data

 11:26 (GMT) 10 Feb

 [Forex Flows]

BRL is starting the day slightly stronger with mixed global backdrop where DXY gains are countered by higher oil and metal prices on strong results of China's trade balance. BRL is up 0.12% to trade at 3.1236. Local market is still mindful of BCB warning about BRL overvaluation in the back of traders' mind. Mixed news in the political scenario with the STF advancing inquiries on PMDB leaders and congress installing labor and social security commits to start on the work for the pension reform.

No data in the domestic market but news over the possibility of lower central inflation target could put some pressure on the DI market, where
Jan 18 is down 2bp to 10.70% and Jan 21 is down 3bp to 10.28%. The pricing in for February meeting rate cut is down 1bp to 79bp and for April is down 1bp to 71bp.

In the US, Dec import prices are due on Friday, with the advance Feb Michigan CSI following. This could attract attention if there is a big shift, but most signals on sentiment are currently showing recent sharp improvements being largely sustained. Also due on Friday are annual PPI revisions and Jan budget data.