US Dollar Index is attempting to recoup some of its losses ahead of PPI and Retail Sales statistics.
On Wednesday, the US Dollar (USD) is trading into a new reality. Lower-than-expected Consumer Price Index (CPI) figures for October triggered a tectonic shift in all asset classes of financial markets: equities soared, commodities rallied, bonds soared, and in the forex market, Scandinavian and Central-Eastern European (CEE) currencies were the biggest winners on the back of a weakening Greenback.
This Wednesday’s calendar is once again a jam-packed one: US Retail Sales and the Producer Price Index are set to be announced. Expectations are high following Tuesday’s inflation results, so the data releases are expected to simply temper market excitement. The US Dollar Index (DXY) is projected to recover somewhat, as traders await news from San Francisco, where US President Joe Biden will meet with Chinese President Xi Jinping.
Daily summary: The US dollar has reversed two months of advances.
The US budget deadline is set for November 17. On Tuesday, sentiment was lifted further by growing optimism that a US government shutdown would be avoided.
US Vice President Joe Biden will visit Chinese President Xi Jinping at the historic Filoli mansion. Wednesday, south of San Francisco.
Wednesday’s agenda began with the release of the Mortgage Bankers Association’s (MBA) weekly mortgage applications, which increased by 2.8% last week.
The November New York Empire State Manufacturing Index will be issued at 13:30 GMT. Expectations contract less sharply, from -4.6 to -2.8.
Traders are waiting for US PPI Data.
A large batch of data will be released around 13:30 GMT:
PPI (Producer Price Index):
Monthly headline PPI is predicted to fall from 0.5% to 0.1%, with forecasts ranging from -0.3% to 0.4%.
The monthly Core PPI is predicted to remain unchanged at 0.3%, with forecasts ranging from 0.1% to 0.3%.
The annual headline PPI is predicted to fall from 2.2% to 1.9%, with forecasts ranging from 1.6% to 1.9%.2.2%.
The annual CPI is predicted to remain stable at 2.7%, with estimates ranging from 2.5% to 2.8%.
Figures for US Retail Sales:
The monthly number for October is predicted to range between 0.7% and -0.3%, with estimates ranging from -0.7% to 0.3%.
Furthermore The Retail Sales Control Group figure is predicted to fall from 0.6% to 0.2%, with estimates ranging from -0.3% to 0.5%.
As is customary, the revisions will have a greater impact on the market than the actual statistics. So keep an eye out for any knee-jerk reactions minutes after the new statistics are published.
Business inventories for September are likely to remain stable at 0.4% around 15:00 GMT.
Equities have surpassed Tuesday’s euphoria. The Hang Seng is the big winner, up more than 3%. All of Europe’s Important European indices are up about 1%, but US equity futures are only slightly higher.
Moreover According to the CME Group’s FedWatch Tool, markets are pricing in a 94.5% possibility that the Federal Reserve will hold interest rates steady at its December meeting, up from 85.7% on Tuesday morning.
The benchmark 10-year US Treasury yield is currently trading at 4.45%, down from 4.64% on Monday.
