Weekly economic & financial commentary

Wells Fargo Research Team Wells Fargo

Summary

United States: A Moderating but Resilient U.S. Economy

This week's data depict an economy cooling in an orderly fashion: Inflation is easing gradually, consumer spending retains underlying resilience, and housing is finding a foothold as financing costs modestly retreat.
Next week: Construction Spending (Wed.), Personal Income & Spending (Thu.)

International: Gentle Data Shifts, Anchored Policy Paths

In an otherwise relatively quiet week for global economic data releases, the U.K.’s November GDP print delivered an upside surprise, though we still expect the Bank of England to remain on a gradual easing path. Meanwhile, India’s December inflation data showed a modest acceleration, unlikely to derail our expectations for one additional rate cut this year.
Next week: China GDP (Mon.), Australia Employment (Thu.), Bank of Japan Policy Rate (Fri.)

Topic of the Week: More Pressure on the Federal Reserve Emerges

News broke earlier this week that the Federal Reserve received grand jury subpoenas from the Department of Justice, escalating the Trump administration's pressure on the nation's central bank. While we do not believe this will alter the near-term course of monetary policy, it will make the next Fed Chair's job that much more difficult to build a consensus among the 19 members of the Federal Open Market Committee.

Download the Full Report!

Author

Wells Fargo Research Team

Wells Fargo

EUR/USD turns negative around 1.1600

EUR/USD is once again under selling pressure, sliding back towards the key 1.1600 support area amid a renewed upswing in the US dollar. The greenback has gathered further momentum after President Trump voiced praise for Kevin Hassett in connection with the Fed chair role.

GBP/USD trims gains, back below 1.33400

The current rebound in the Greenback prompts GBP/USD to surrender a big chunk of its earlier gains and slip back below the key 1.3400 mark on Friday. The marked bounce in the US Dollar followed the markets’ reaction to the likelihood that K. Hasset could become the next Fed Chief.

Gold weakens below $4,600 on USD rebound

Gold adds to Thursday’s small decline and breaks below the $4,600 mark per troy ounce at the end of the week. The precious metal’s corrective move comes on the back of easing geopolitical tensions and the late improvement in the Greenback.

Crypto Today: Bitcoin, Ethereum, XRP hold support amid waning retail demand

Bitcoin slips but holds above $95,000, weighed down by declining retail demand. Ethereum trades narrowly between the 100-day EMA support and the 200-day EMA resistance. XRP edges lower for the third consecutive day, driven by a persistently weakening derivatives market.

Week ahead – US PCE and Davos in focus for Dollar traders – BoJ meets

US PCE, PMIs and remarks from Davos could impact Fed cut bets. BoJ to stand pat; focus to fall on guidance after election reports. UK CPI and retail sales data may confirm bets of more BoE cuts.

Dash Price Forecast: DASH defies headwinds, paces toward $100

Dash extends its rally, reaching an intraday high of $96.85 despite the broader crypto market correcting. Retail interest in DASH explodes as futures Open Interest soars to $165 million.