Forex - US: North American Summary and Highlights 12 Jan


 21:06 (GMT) 12 Jan

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US: North American Summary and Highlights  12 Jan (BAHC9901)

Overview

Some follow through from the prior day's Trump disappointment, with EUR/USD probing above 1.0650. Equities tested range support, supporting Treasuries remaining firm, but the moves were corrected in late trade.

News highlights

* Fed's Lockhart - I'm more cautious camp forecasting 2 rather than 3 hikes

* Fed's Harker - may need to consider stopping reinvestments when Fed funds reach 1%

* Fed Evans - supports reinvestment until rate hikes well underway, fiscal policy could lift growth a couple of tenths a year.

* Fed's Bullard - balance sheet rill-off may be better than aggressive rate hikes.

* Fed's Kaplan - 3 2017 rate hikes appropriate, among biggest disagreements at Fed is how quickly to move, trimming balance sheet should wait until rate hikes further along.

* Initial Claims 247k from 237R vs Mkt 255

* US Dec Import Price Index 0.4% m/m from -0.2R vs Mkt 0.7

US: North American Summary and Highlights  12 Jan (BAHC9902)

Currencies:

* The fast money couldn't resist the lure of stops at 1.0650 on EUR/USD though the initial follow through was limited. With the correction failing to reach 1.0600 shorts will be hoping that US retail sales on Friday live up to expectation.

* USD/JPY slipped back to the 113 handle as equities struggled, GBP/JPY breaking below 140 is also adding some weight, though there was quite a strong recovery through 114.50 as equities moved off the lows. There has been no sight nor sound of MoF officials as yet but it can be only a matter of time.

US: North American Summary and Highlights  12 Jan (BAHC9903)

* Cable was sticking fairly close to EUR/USD but has lost ground late on. PM May is to make a speech on Brexit next Tuesday which has seen GBP lower again, GBP/JPY sub 140 and EUR/GBP getting close to .8750.

* CAD made some ground back against the AUD earlier but has lost that and more as Crude comes off the top. AUD/USD was unable to consolidate the break back over .7500, but the AUD/CAD break back over .9800 held. NZD is still somewhat on the side-lines.

* We have seen the first real movement of 2017 on the Scandies with EUR/SEK stepping down to trade just below 9.50 as CPI came in above expectations. The minutes of the latest Riksbank meeting again warn against too rapid an appreciation of the SEK, though a EUR600mn expiry at 9.50 today did help apply the brake. EUR/CHF remains faithful to 1.0700/1.0750, the SNB likely on guard in case the risk-off tone promotes one of the more traditional flights to safety.

US: North American Summary and Highlights  12 Jan (BAHC9904)

Bonds:

Relatively high volume trade overnight sees follow through to new yield lows, as the Trump disappointment move saw another wave. Subsequent consolidation seen, with heavy equities keeping bond supported into 30yr supply. Auction goes smoothly with solid results, even with the pre-sale richening, though comes significantly off best levels after as equities corrected. Secondary data (claims, import prices) uneventful and ignored. 2s -1.2bps @ 1.17%, 5s -2.3bps @ 1.86%, 10s -1.6bps @ 2.36%, 30s -0.2bps @ 2.95%.

* Agency Spreads: Freddie/Fannie 5s -0.1/0.0 bps, 10s -1.6/-0.3 bps.

* Swap Spreads: 2s -0.17bps, 5s +0.30bps, 10s +0.13bps.

Equities:

The roll back lower seen after the Trump disappointment extended with S&P testing the recent inner range floor, though the market came well off the lows in afternoon trade. The S&P closed -0.21%, financials dragged by drop back in yields and ahead of earnings reports Friday, kicking off earnings season.

To Be Released -

Data:

21:45 GMT - NZ: Retail Card Spending (Dec) % m/m (Mkt: 1 Prev: -0.1)

05:30 GMT - NL: Retail Trade (Oct) % y/y (Prev: 1.1)

07:00 GMT - DE: Wholesale Price Index (Dec) % m/m (Prev: 0.1)

07:00 GMT - DE: Wholesale Price Index (Dec) % y/y (Prev: 0.8)

07:00 GMT - FI: CPI (Dec) % m/m (Prev: 0)

07:00 GMT - FI: CPI (Dec) % y/y (Prev: 0.7)

08:00 GMT - ES: CPI (Dec) % m/m (Mkt: 0.6 Prev: 0.6)

08:00 GMT - ES: CPI (Dec) % y/y (Mkt: 1.5 Prev: 1.5)

08:00 GMT - ES: HICP (Dec) % m/m (Mkt: 0.5 Prev: 0.5)

08:00 GMT - ES: HICP (Dec) % y/y (Mkt: 1.4 Prev: 1.4)

13:30 GMT - US: PPI (Dec) 4cast: 0.2% m/m (Mkt: 0.3 Prev: 0.4)

13:30 GMT - US: PPI (ex Food & Energy) (Dec) 4cast: 0.1% m/m (Mkt: 0.1 Prev: 0.4)

13:30 GMT - US: Retail Sales (Dec) 4cast: 0.7% m/m (Mkt: 0.7 Prev: 0.1)

13:30 GMT - US: Retail Sales (ex Auto) (Dec) 4cast: 0.5% m/m (Mkt: 0.5 Prev: 0.2)

15:00 GMT - US: Business inventories (Nov) % m/m (Mkt: 0.6 Prev: -0.2)

15:00 GMT - US: Univ of Mich Sent. (Prelim) (Jan) (Mkt: 98.5 Prev: 98.2)

19:00 GMT - US: Budget (Dec) USD bn (Mkt: -26 Prev: -136.7)

Events & Auctions:

22:30 GMT - US: Fed's Yellen Speaks in Washington

22:45 GMT - NO: Norges' Nicolaisen Speaks in Oslo

00:00 GMT - US: Fed's Yellen Addresses Town Hall With Educators

09:30 GMT - UK: BoE's Saunders Speaks in London

11:00 GMT - UK: 182day bills auction - GBP 2.50 Bn (Act)

11:00 GMT - UK: 28day bills auction - GBP 0.50 Bn (Act)

11:00 GMT - UK: 92day bills auction - GBP 2.00 Bn (Act)

11:00 GMT - SE: Riksbank's Ohlsson Speaks in Stockholm

14:30 GMT - US: Fed's Harker Speaks in Philadelphia


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