UK retail sales is the most important macroeconomic reading during the day
US housing data and UoM reading worth attention as well
Oil could struggle to end the week with a gain, oil rigs data ahead
FX investors seem to slowly get used to seeing the US dollar falling almost each day and the story continues today. After disappointing retail sales and industrial production releases the greenback rout accelerated, however, today’s set of macroeconomic prints could soothe dollar pain at least to some extent. Otherwise, it’s worth taking a closer look at UK retail sales as well as a weekly change in oil rigs, GBP and oil might wobble during the day.
9:30 am BST - UK retail sales: The British pound has been offered recently many readings including the BoE decision. Overall, the story has been quite upbeat for the currency as the Bank of England warned about a possible need to hike rates a bit quicker than previously thought whereas core inflation exceeded forecast in January. On the face of it, it seems to be a promising mixture for the currency, on balance, the data was fairly ugly over the course of the past weeks, hence one may suspect that without an improvement there a more durable gain might be contained (the GBP might gain on the back of US dollar weakness anyway). Therefore today’s retail sales are so important. The consensus points to 2.6% yoy and 0.5% mom for January.
US building permits and housing starts (1:30 pm BST) and University of Michigan consumer sentiment (3:00 pm BST): As we outlined above the US dollar has had a miserable period of time lately despite a healthy increase in yields. The currency appears to have yet another chance this week to wipe off at least some of its losses. All comes down to the Friday’s data where market expectations indicate 1234k for housing starts and 1300k for building permits in January. Taking into account slightly improved confidence among US homebuilders one may hope for surprises to the upside. Furthermore, consumer confidence measured by UoM is expected to come in at 95.5 in February.
6:00 pm BST - Oil rigs count: Oil prices have had quite a successful week so far after a significant decrease seen in the past one. However, if the Baker Hughes data shows another huge jump in active oil rigs, it could weigh on the commodity price erasing the whole weekly gain. Do notice that the count of US oil rigs has jumped from 742 to 791 just since the beginning of the year.
US dollar index (USDIDX on xStation5) could draw a possible double bottom at a daily interval. If the data surprises to the upside, it could give rise to a pullback toward an upper boundary of a descending channel.