EUR / USD, GBP / USD.
On Monday, counter dollar currencies showed a bearish correction expecting for an explanation for the current US monetary and investment policy before the speech of President D. Trump in Congress and the Fed's decision on the rate on Wednesday. Although only a short accompanying statement will be published at this meeting. Personal income of American consumers for the month of December increased by 0.4% against the forecast of 0.3%, while personal expenses also increased by 0.4% (the forecast was even more optimistic 0.5%). Such optimistic data could not give impetus for further growth, even on the main S & P500 index of the stock market fell by 0.67%. The yields have increased almost across the entire range of US government bonds. Prices for energy futures fell (oil -0.71%). Thus, the correction occurred basically in all financial markets.
With the corresponding market sentiments, the correction or consolidation could possibly continue. The GDP data of the eurozone for the fourth quarter will be released today. The preliminary estimate shows an increase of 0.6% (2.7% YoY vs. 2.6% YoY in the third quarter). French consumer spending for December is expected to increase by 0.4% after growing by 2.2% in November, which is the highest jump since December 2010.
In the United Kingdom, neutral lending indicators are expected. The number of issued permits for mortgage lending in December is projected to increase from 65 thousand to 66 thousand, the net volume of new loans issued to individuals may fall from November's 4.9 billion pounds to 4.8 billion. At 3:30 PM London time, the Bank of England Governor Mark Carney will have a speech to be held in the House of Lords.
In the United States, the consumer confidence index from the Conference Board for the current month is expected to increase from 122.1 to 123.2. The S&P / Case-Shiller house price index in the 20 largest US cities is expected to fall from 6.4% YoY to 6.3% YoY in November. Also, President Trump presents a bill on infrastructure investments later this day.
As a result, the expected indices contributed to the formation of market consolidation. For the single European currency, its movement could be along the level of 1.2365, while the British pound is dealing with the range of 1.4040 / 80. There is a possible reduction in the range of 1.3980-1.4000.
USD / JPY.
On Monday, the Japanese yen was not exempted from the market and further dealt with the dollar. The data on household expenses in Japan came out very weak today. In December, the household expenditure index fell by 2.5% against the forecast of -0.6% and growth by 2.1% in November. On the annual basis, the decline was from 1.7% to -0.1% YoY, with a 1.6% YoY expectation. At the same time, the unemployment rate increased from 2.7% to 2.8%.
After the decline yesterday in the US stock market, Asian indices today are working out a slide at an accelerated pace. The Japanese Nikkei 225 is down by 1.66%, the Chinese indicator China A50 came in at -0.95%, while the Indonesian IDX Composite is at -1.22%.
Japanese government bond yields are growing. Today, the yield on 7-year securities has moved to positive territory for the first time since August 2017, showing an increase from -0.003% to 0.002%. The data on industrial production for December is scheduled tomorrow, with an expected 1.5% increase. However, there are some difficulties with the Chinese manufacturing PMI, with the forecast at 51.5 against 51.6 earlier. We are expecting for further weakening of the USD / JPY currency pair, with a target at 108.00, then 107.40.
* The presented market analysis is informative and does not constitute a guide to the transaction.