American FX Outlook: Empire State manufacturing activity headlines
|What you need to know before markets open:
- After prolonged weekend for Americans the US Dollar opens the holiday-shortened week in a corrective mode after falling lower for four days in a row.
- Berlin chamber of German Social Democratic Party reportedly voted against formal coalition talks with Angela Merkel’s CDU/CSU putting the chances of a new government in doubts.
Tuesday’s market moving events
- The US Empire State manufacturing index is expected to remain unchanged at 18 in January.
- As the US Government shutdown nears (January 19) political discussions are heating up, with markets pretty much sure that the deal will be done by Friday.
Major market movers
- After four days of losses, the US Dollar correcting higher rising 0.4% on US Dollar index basis.
- The EUR/USD was under pressure falling 0.5% on Tuesday after reports of Berlin chamber of German Social Democratic Party reportedly voting against formal coalition talks with Angela Merkel’s CDU/CSU.
Earlier in Asia/Europe
- German consumer inflation rose 0.6% over the month and 1.7% y/y in December.
- German wholesale prices rose 3.5% on average in 2017 compared to 2016.
- The UK inflation decelerated to 3.0% y/y in December, with core inflation also decelerating to 2.6% y/y.
- The Bank of England Deputy Governor Sam Woods said the Bank’s contingency planning will be stepped up if there is no Brexit transition agreement by the end of Q1.
- Czech central banker Benda said that planned releases of FX rate outlook in new forecasts are not a manual for investors on crown development.
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