American FX Outlook: Factory gate inflation and US regional manufacturing headline

What you need to know before markets open:

  • The world of money and investment is getting ready for inflation reappearing back on the horizon. The US core inflation rose 1.8% y/y in January giving an initial boost to the US benchmark Treasury yields with US equities falling and the US Dollar rising. The U-turn that followed saw US Dollar falling past key levels against major while stocks recovered.
  • The US factory gate inflation and regional manufacturing data headline Thursday.
  • Japan’s parliament is set to announce nominations for the position of next Bank of Japan governor on Friday, February 16, at 2:00 GMT that equals 11:00 Tokyo time.

Thursday’s market moving events

  • New York Empire State manufacturing index is expected to rise to 17.5 in February.
  • The US PPI is expected to rise 0.4% m/m while increasing 2.5% y/y in January.
  • The US weekly jobless claims are expected to rise 230K
  • Philadelphia Fed index is expected to inch lower to 21.1 in February.
  • The US industrial production is set to rise 0.2% m/m in January.

Major market movers

  • The US Dollar is falling for the fourth day in a row, unable to materialize the advance of the US benchmark Treasury yields towards 3% following the inflation surprising on the upside. The stock market U-turn saw US Dollar fall massively across the board.
  • The Japanese Yen advanced to fresh 15-months high of after the ¥106.25 after the Finance Minister Taro Aso ruled out any kind of FX intervention.

Earlier in Asia/Europe

  • Australian employment rose 16.0K in January with the unemployment rate steady at 5.5%.
  • Japanese industrial production rose 2.9% m/m in December.
  • Spanish inflation fell massive 1.1% m/m in January while increasing 0.6% y/y.
  • Both ECB executive board member Yves Mersch and ECB chief economist Peter Praet spoke in Paris on Thursday with no market-moving headlines crossing the wires.
  • The Eurozone trade balance reached an above expectations strong surplus of €23.8billion in December

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