US consumers are slightly more confident than expected, with a score of 93.3 points. Current conditions did fall short with 105.1 points while expectations are higher with 85.7 points. Will this cheer markets?
Not so fast.
The preliminary consumer confidence measure for January by the University of Michigan was expected to stand at 93 points, up from 92.6 in December. The conditions component was predicted to slide from 108.1 to 107.3 and the Expectations figure to rise from 82.7 to 82.8 points.
The market mood was clearly gloomy ahead of the publication. Falling oil prices, a slide in stocks from China through Europe and up to the US and the unimpressive retail sales release from the US all weighed and led to safe haven flows.
- EUR/USD traded at 1.0950 before the publication, aided by safe haven flows and uncertain by what Draghi could do.
- USD/JPY fell under 117, aided again by safe haven flows.
- GBP/USD was around 1.4350, unconvinced by the “no news” from the BOE.
- USD/CAD traded around 1.4433, after already visiting much higher levels on the commodity crash. Crude oil is getting comfortable under $30 in both WTI and Brent figures.
- AUD/USD traded around 0.5894, the lowest since 2009.
- NZD/USD was at 0.6440. The kiwi got carried away, despite OK fundamentals.
After the publication, we are seeing limited moves, but is seems that the general trends might be resuming: a stronger euro, a stronger yen and weakness for all the rest.
Retail sales dropped by 0.1% in December, but at least there was an upwards revision in the headline figure. Core sales also dipped by 0.1% and here we also had a downwards revision. The most painful point came from the control group, which fell by 0.3% countering expectations for a rise of the same scale. In addition, it came on top of a downwards revision.
Also manufacturing related figures were poor: the Empire State Manufacturing Index plunged from -6.2 to -19.4 points, much worse than -4 expected. The negative numbers imply contraction. And industrial output was negative as well: -0.4% against -0.2% expected, and yes, with a downwards revision.Get the 5 most predictable currency pairs