The recent announcement of inflation data (Consumer Price Index/CPI) from the United States continues to sway the financial market during the European trading session on Thursday (January 16, 2024). A batch of economic reports from the US is scheduled for release at 8:30 PM WIB, which could lead to significant market movements this evening.
Here’s the data from Trading Central:
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- Philadelphia Manufacturing Index: forecast -10 compared to previous -16.4
- Retail Sales (month-on-month/December): forecast 0.5% against last month’s 0.7%
- US Retail Sales (year-on-year/December): forecast 4% compared to 3.8% previously
- US Unemployment Claims (January 11): forecast 209K versus 201K last time
GOLD
The price of Gold (XAUUSD) rose at the beginning of the European session, reaching a daily peak of $2,705.29 per troy ounce. This is the highest level since December 12, 2024.
The slowdown in the growth of core US inflation data strengthens the expectation that the Federal Reserve may lower interest rates twice this year. This sentiment remains bullish for Gold, and if the US economic reports released tonight are predominantly worse than the forecast, the positive sentiment could increase further.
OIL
Oil prices (CLS10) decreased to $79.80 per barrel during the European trades, marking a decline of $0.68 from Wednesday’s trading closure.
This decrease is attributed to profit-taking activities after Oil previously reached a six-month high. Should the US economic data be released poorly tonight, there is a possibility for Oil to regain positive sentiment. This is due to market optimism that the Federal Reserve may cut rates twice this year, which could enhance economic performance.
EURUSD
The EURUSD experienced a rebound at the start of the European session, climbing to 1.03014 after previously dropping to 1.02794. The movement of EURUSD remains largely stable following a high volatility session yesterday.
Tonight, should the US economic data fall short of the forecast, there is potential for EURUSD to gain positive sentiment.
GBPUSD
GBPUSD fell at the beginning of European trading, hitting a daily low of 1.21956 as pressures mounted following the release of the UK’s Gross Domestic Product (GDP) data.
For November, GDP reported a growth of 1% year-on-year (YoY), lower than the forecast of 1.5% YoY and the preceding month’s 1.1% YoY. This underperformance reinforces concerns over the UK’s economic conditions and the risk of stagflation, where high inflation coincides with slowing economic growth.
Such sentiments are likely to continue influencing GBPUSD trading this evening.
USDJPY
USDJPY reduced its losses after plummeting over 120 pips to 155.206 earlier in the day. The decline follows comments from Bank of Japan Governor Kazuo Ueda regarding potential interest rate hikes in response to improved economic and inflation conditions.
Conversely, market participants are regaining optimism that the Federal Reserve may cut rates twice this year. If the US economic data is worse than the forecast tonight, USDJPY may again come under pressure.
Nasdaq
Following a strong rise in trading yesterday, the Nasdaq index continued to increase at the start of the European session, reaching a level of 21,565. Market optimism that the Federal Reserve may lower interest rates twice is fueling this rise.
This suggests that if the US economic data tonight is below the forecast and the belief that the Fed will cut rates doubles, Nasdaq could see additional positive sentiment.
