Market news 19/01/24

Commerzbank believes that the market is not eager to lower the euro ahead of the upcoming ECB and Fed meetings. Analysts expect the ECB to be cautious when discussing the first rate cut, although the possibility of a cut is not ruled out. In anticipation of the meeting, the currency market is unlikely to actively sell the euro.

UK retail sales fell 3.2% m/m in December, against forecasts of -0.5%. The underlying retail sales index fell 3.3%. GBP/USD remained below 1.2700 due to the lack of data. According to the Office for National Statistics (ONS), annual retail sales fell 2.4% in December, versus forecasts for a 1.1% decline.

Japan's inflation slowed in December, according to the country's statistics bureau. The nationwide consumer price index was 2.6% year-on-year, down from 2.8% in November. The CPI fell to 2.3% y/y from 2.5% y/y. This data reflects price changes for a representative basket of consumer goods and services. Inflation affects the purchasing power of the Yen, and a lower reading could be positive for the Japanese currency.

New Zealand's Business Activity Index (PMI) continues to decline, reaching 43.1 in December, down from 46.7 the previous month. This is the ninth consecutive month of contraction in the country's manufacturing sector. Despite the decline, the index remains above October's low of 42.9. Some 58.7% of the comments were negative, pointing to a general lack of demand and low sales. Experts note that the reason for the decline is the manufacturing component, which lags far behind the long-term average.

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