US Dollar tests for support with risk appetite returning

NEW YORK (February 15) The US Dollar (USD) is further trimming its weekly gains, which got booked on Tuesday in the aftermath of the red hot inflation report. Several analysts and economists were quick to write off the report as a one-off, with even US Federal Reserve member Austan Goolsbee saying that markets should not take into account only this Consumer Price Index (CPI) number. The disinflationary pathway to rate cuts is still very much intact and a cut is on the horizon.

On the economic data front,there is  a chunky batch of data with all eyes on Retail Sales. Next to that some lighter data in the form of Industrial Production and Import/Export Prices that could give more support to this idea that disinflation is still there and the recent CPI was just a blip on the radar. To round it all off,  Fed member Christopher Waller will speak at the end of this Thursday. 

Daily digest market movers: Price Index components can confirm Goolsbee

• The first big batch of data is to be released at 13:30 GMT:
• Retail Sales for January:
  • Monthly Retail Sales expected to contract by 0.1% after a 0.6% increase in the previous month.
  • Monthly Retail Sales without cars are seen rising by  0.2% after a 0.4% expansion in December.
  • As always with Retail Sales, the revisions will be more important than the actual numbers.
• NY Empire State Manufacturing Index for February is expected to head from -43.7 to -15.
• The Philadelphia Fed Manufacturing Survey for February is seen heading from -10.6 to -8.
• The Import/Export Price Index for January is due as well:
  • The Monthly Import Price Index is seen unchanged at 0%.
  • The Yearly Import Price Index contracted 1.6% in December with no forecast.
  • The Monthly Export Price Index is expected to fall 0.1%.
  • The Yearly Export Price Index dropped by 3.2% in the previous month, no forecast available.
• Weekly Jobless Claims are due as well:
  • Initial Claims Previous was at 218,000 with 220,000 expected.
  • Continuing Jobless Claims are seen heading from 1.871 million to 1.88 million.
• Industrial Production for January is expected to rise 0.3% after a 0.3% increase around 14:15 GMT.
• A mixed bag of data to be published at 15:00 GMT with the December Business Inventories seen heading from -0.1% to 0.4%.
• US Federal Reserve Board Member Christopher Waller will drop some comments around 18:15 GMT. 
• The US Treasury Department will head to markets to allocate a 4-week bill around 16:30 GMT and a 30-year TIPS auction around 18:00 GMT. 
• Equities are happy with the backtracking on the forward push of rate cuts and are in the green. European equities are up over 0.50%, while US equity futures are mildly in the green. 
• The CME Group’s FedWatch Tool is now looking at the March 20th meeting. Expectations for a pause are 89.5%, while 10.5% for a rate cut. 
• The benchmark 10-year US Treasury Note trades near 4.23%, roughly where it was trading ahead of the inflation report from Tuesday.

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