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UK CPI Misses, US CPI Beats

Nov 14 2019, 08:32 PM (+06) |

USD Higher on Better CPI

The US dollar has been a little firmer today on the back of yesterday’s upside beat in CPI. Inflation was recorded as having grown at its fastest pace for seven months over October with a 0.4% monthly rise.

The data has seen further reductions to the market pricing for a December rate cut, which now sits at 0% and there’s a weakening of rate cut pricing at the start of next year. USD index trades 98.20 last.

Germany Avoids Technical Recession

EURUSD has had a quiet start to the day and is trading just in the red as of writing. The latest data from the eurozone this morning showed German GDP managing to hold in positive territory in Q3 at 0.1%.

This has confirmed that Germany has avoided entering a technical recession. However, conditions remain weak and the outlook for EUR remains skewed to the downside. EURUSD trades 1.100 last, still below the 1.1024 level for now.

GBP Rallies Despite Inflation Miss

GBPUSD has had a solid session so far today with price rallying strongly. These moves come despite poor economic news yesterday. UK CPI hit three-year lows at just 1.5% year on year in October. The weak reading reflects soft underlying conditions in the face of ongoing Brexit uncertainty and is boosting dovish BOE risks. The upside move was tempered this morning by a negative print in October Retail Sales which came in at -0.1%. GBPUSD trades 1. 2860 last.

Equities Remain Supported

Risk assets have seen some upward movement across the morning. Having started lightly, the SPX500 has popped higher over the last hour trading up to 3094.93 as of writing. Better data is creating a more encouraging atmosphere for risk appetite today though focus is still on whether the US and China will sign a trade deal this month.

Safe Havens Flows Still Noted

Safe havens have had a better morning today with gold and JPY rising against USD despite the recent lift in equities. The resilience in JPY and gold reflects the level of caution which still underpins risk appetite as we head into the weekend.

Traders know that the potential for disappointment is still there. XAUUSD trades 1467.86 last, still well beneath the 1481.93 level. USDJPY trades 108.66 last, still sitting near the bottom of the recent sell-off.

Crude Climbing on Data

Oil prices have been higher today on the back of better economic data which has lifted the mood a little. The key driver remains the ongoing US-China trade talks. If the US and China push on and sign a deal this will be firmly bullish for oil.

However, if a deal is not signed in the near term and uncertainty persists, this will weigh on oil prices once again. Later today traders will receive the delayed US EIA inventories report which is forecast to show a build of 1.5 million barrels. Crude trades 57.66 last.

Loonie Still Looking For Higher Levels

USDCAD continues to trade higher today with the recent strength in USD outweighing the rise in crude prices for now. USDCAD is trading roughly in the middle of the 1.3207 – 1.33 range though the move to the topside has become more labored over recent days. US data later today could provide the catalyst for further upside if we see another upside surprise.

AUD Falls on Weak Employment Data

AUDUSD has weakened today, trading down to fresh 2019 lows as employment reports released overnight disappointed. AUD saw -19k jobs over the last month, taking the unemployment rate back up to 5.3% from 5.2% prior. Solid employment has been at the heart of the RBA’s positive spin on the economy and these readings will be received poorly at the bank. AUDUSD trades .6791 last.

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