INVESTORS GEAR UP FOR FINAL SESSION OF 2017
The year 2017 could go out on a whimper this Friday, as a dearth of economic data keeps investors on the sidelines. It has been a relatively quiet week for the financial markets amid the holidays. This will likely continue in the final session of the week as market participants hold out until after the new year.
Action begins at 08:00 GMT with a report on Spanish inflation. Spain’s harmonized index of consumer prices (HICP) is expected to rise 1.5% annually in December, down from the previous month’s 1.8% increase.
One hour later, the Italian government will report on producer inflation for the month of November. In a separate report, the Spanish government will issue its current account balance for the month of October.
The Greek government will report on retail sales and producer inflation at 10:00 GMT. The retail sales report will cover October, while the producer data will be for the month of November.
Germany will issue its latest inflation report at 13:00 GMT. Germany’s HICP is expected to rise 1.4% year-over-year, down from 1.5% the previous month. The consumer price index (CPI) is forecast to rise 1.5% annually.
Energy traders will be closely monitoring the weekly rig count data courtesy of Baker Hughes. The report will be released at 18:00 GMT.
In currencies, the US dollar declined sharply against a basket of competitors on Thursday. The US dollar index (DXY), which tracks the performance of the greenback against a basket of six peers, fell 0.4% to 92.60. With the decline, the greenback is down 0.7% over the past two sessions.
Europe’s common currency is regaining momentum, with the EUR/USD surging past 1.1900 on Thursday. The pair was last seen trading in the mid-1.1900 region. EUR/USD remains well supported at the 100-day moving average above 1.1800. The psychological 1.2000 region is likely the next major resistance level.
The pound sterling extended its rally on Thursday, as the cable traded above 1.3450. The pound is now on the offensive with the US dollar falling to four-week lows. The next major resistance is located at the psychological 1.3500 level. On the opposite side of the ledger, immediate support is located in the 1.3400 region.
US crude futures advanced on Thursday after government data showed a bigger than expected drawdown in commercial inventories. The US Energy Information Administration (EIA) said crude stockpiles fell by 4.6 million barrels in the week ended 22 December. Crude stocks fell by nearly 6.5 million barrels the previous week. US oil prices spiked to new two-and-a-half year highs on Friday, climbing above $60 a barrel. Strong fundamental indicators could keep the market trekking higher into the new year.