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The US CPI is carrying "terrorist data". The US government has to "close the door"?
FX168 Financial News Agency
In the past week, market sentiment has worsened as concerns about the global economic slowdown have intensified. The European Union, the Bank of England and the Reserve Bank of Australia have successively lowered their economic growth expectations, and have also put aside the tightening policy agenda, which makes the United States and the US dollar the "best of the difference." Looking forward to this week, investors will usher in many key risk events. In terms of economic data, US CPI and retail sales will be highly concerned. In addition, Sino-US economic and trade negotiations, Brexit and US government shutdown risk are also the focus of the market.
Focus on US CPI and retail sales data
This week, the US will have a series of important data released, including US retail reports and CPI data, which are expected to trigger market volatility. Analysts pointed out that the newly released data will further explain the state of the US economy.
At 21:30 Beijing time on Wednesday, the US will release December consumer price index (CPI) data. As the inflation rate stays low, the Fed may remain patient.
According to foreign media surveys, the overall CPI rate in the United States is expected to rise by 1.5% in December, up from 1.9% last month. The core CPI rate in December is expected to rise by 2.1%, up from 2.2% last month.
The United States is finally going to announce its December retail sales report, which was postponed due to government closures.
At 21:30 Beijing time on Thursday, the US will release retail sales data. Given its consistent influence, data performance can have a significant impact on the market.
Foreign media surveys show that the monthly retail sales rate in the United States is expected to increase by 0.1% in December, up 0.2% last month. The core retail sales rate in December is expected to be flat, up 0.2% last month.
Because the Fed emphasizes that interest rate decisions will depend on economic data, and consumer spending accounts for about 70% of US economic output, US retail sales data often “stuns” in financial markets, so it is called “terror data”.
Despite the recent strong performance of the US dollar, analysts pointed out that if the US economic data is weak, the US dollar still faces downside risks.
The Bloomberg dollar spot index rose about 0.9% last week, the biggest weekly gain since August last year.
FXTM research analyst Lukman Otunuga said: "Any sign of the US economic slowdown is likely to accelerate the depreciation of the dollar, as the dollar's safe-haven status is questioned."
Phillip Streible, senior market strategist at RJO Futures, said: "Retail sales may indicate continued weakness in the economy, which may provide some support for gold prices. In terms of CPI and PPI, this is inflation data. We have recently seen inflation weaken."
Sino-US economic and trade negotiations
China’s Ministry of Commerce issued a press release on Saturday saying that Liu He, a member of the Political Bureau of the CPC Central Committee and vice-premier of the State Council and the Chinese leader of the China-US Comprehensive Economic Dialogue, will be in Beijing from February 14th to 15th, with US Trade Representative Wright Heze Finance Minister Mnuchin held a new round of high-level Sino-US economic and trade consultations. The two sides will further discuss the issue of common concern on the basis of the recent consultations in Washington. The US team will arrive in Beijing on February 11.
Earlier, according to the Xinhua News Agency, from January 30 to 31, the Political Bureau of the CPC Central Committee, the Vice Premier of the State Council, and the Chinese leader of the China-US Comprehensive Economic Dialogue, Liu He, led the Chinese team and the US trade representative led the team of the US team in Washington. Hold economic and trade consultations. Under the guidance of the important consensus reached by the two heads of state in Argentina, the two sides discussed trade balance, technology transfer, intellectual property protection, non-tariff barriers, services, agriculture, implementation mechanisms and Chinese concerns. The leaders of the two sides focused on frank, concrete and constructive discussions on issues of trade balance, technology transfer, intellectual property protection, implementation mechanisms, and issues of concern to China, and made important progress. The two sides also clarified the timetable and roadmap for the next consultation.
British Prime Minister Teresa May has set a deadline for February 13th with a revised agreement to return to Parliament.
Teresa May continued to try to persuade European counterparts to revise the Brexit agreement and amend the legally binding text on Irish guarantees. But she was repeatedly rejected.
According to a report by British Sky News, British Prime Minister Teresa May told Conservative Party members that a "meaningful vote" on the government's Brexit agreement will be held on February 13.
If it fails - it seems very likely at the moment - she has indicated that she will make a statement and move a motion on the same day, and the member can amend and vote on the next day.
Bloomberg reported that Teresa May may postpone voting in order to have more time to try to make progress with the EU.
According to the British "Daily Telegraph" reported on Friday, the second Brexit vote scheduled to be held on Wednesday will be postponed until February 25, 2019.
The US government has to close again?
According to Bloomberg, according to US lawmakers and assistants, the congressional negotiations aimed at preventing the government from re-arranging and revolving around the border wall budget broke down on Saturday night at local time. The Republican Party and the Democratic Party have temporarily stopped communicating, and this is a threat to the prospect of reaching an agreement when time is running out.
People familiar with the matter said that the border barrier funds raised by negotiators on Saturday were between $1.3 billion and $2 billion. This is far below the $5.7 billion that Trump requires.
If the funding agreement is not reached, the nine federal government agencies and related agencies will close again after a record 35 days of lockout a few weeks ago.
The US media pointed out that if there is no agreement between the two parties, the nine federal agencies and some related departments will be closed again from Friday (February 16).
Acting White House chief of staff Mick Mulvaney said that the government's suspension is not the most likely option, but he "absolutely cannot" rule out this possibility.
US President Trump said in a tweet on Saturday that if the Democrats did not give him all the money required to build a wall, he might take administrative action to build it.
Trump signed the temporary spending bill on January 25 to allow the government to reopen, but he only agreed to maintain the US federal government until February 15.
RJO Futures senior market strategist Phillip Streible said that if there is no agreement and another shutdown, the price of gold may rebound sharply.
Streible said: "When the US government closed the door last time, gold futures prices soared to new highs on December 24. I expect gold to rise again after the news of the US government closing."
Editor in charge: Dou Xiaowei
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