During Monday’s session, two politicians of FOMC had their public appearance – Eric Rosengren. Today we will focus on presenting Dennis Lockhart from FED Atlanta.
Less increases than dots showed?
While Rosengren was convinced that 3 hikes in 2017 is a reasonable projection, according to Lockhart markets should rather prepare for two. Key quotes from his speeches are given below:
- The December report from the labor market was satisfactory
- The data suggest that the US is approaching full employment
- Receives bullish signals from the company owners regarding investments
- GDP around 2% over the next three years
- Economy set to moderate growth
- Inflation at 2% at the turn of 2017 and 2018
- Cyclical rebound since the crisis practically finalized
We have to keep in mind that Lockhart retires late February, so his deputy – which has not yet been announced – can have much more to say. Markets did not react more strongly to yesterday’s FOMC statement representative.
Weak data from China and Australia
During Asian session we had results of Australian retail sales and consumer inflation in China. As you can see in the screenshot below results failed. Preferably falls out only producer inflation (PPI) YoY for December, which definitely beat analysts’ expectations.
On beginning of European session, we received data on unemployment rate in Switzerland. According to these readings it had increased to 3.5% in the past month. USD/CHF H1 -pair at that time was under an interesting resistance – if in this place will be a signal for sell, we can expect at least a decline to lows from January 5
Light calendar for Tuesday
Looking at the other macroeconomic calendar entries, it is hard to trace something particularly interesting. Investors should focus only on:
- Canada, building permit for November
- US jobs by Jolts for November
Accordingly, the trade on the USD/CAD can be quite interesting. Quotations so far has pretty average volatility – we watched test of yesterday’s lows at 1.3200, and a try to go above highs from the end of Monday session. So far, however, it was ineffective. At this point, the price is cumulating over the 38.2% Fibo waiting for a clearer signal to find direction: