Dollar Weakens on Core Inflation Relief, But Bullish Bias Holds
| Action Insight Mid-Day Report 1-15-25 |
Dollar Weakens on Core Inflation Relief, But Bullish Bias Holds |
Dollar extended its near-term pullback in early trading after core inflation data for December came in slightly below expectations, offering a degree of relief to traders and investors. Treasury yields also retreated, with the 10-year yield falling back below the 4.7% mark. Core CPI rose by 3.2% yoy, down from 3.3%, a result that eased fears of renewed inflationary pressures forcing Fed's hand back into tightening. While core inflation remains clearly elevated, the data at least suggests that pressures are not intensifying enough to alter Fed’s loosening bias, with pauses in between moves. Fed fund futures now show 97.3% chance of a hold at the January FOMC meeting, a decision that appears still firmly priced in. Meanwhile, the odds of a rate cut in May have rebounded to 49%, up from 36% the previous day. June remains the most likely timing for a rate cut, with markets assigning nearly 70% probability. This aligns with expectations that Fed might deliver only one rate reduction in 2025.... |
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.0261; (P) 1.0286; (R1) 1.0333; More... EUR/USD's recovery from 1.0176 extends higher today but stays below 1.0435 resistance. Intraday bias remains neutral while further decline is still expected. On the downside, break of 1.0176 will resume the fall from 1.1213 and target 61.8% projection of 1.1213 to 1.0330 from 1.0629 at 1.0083. However, considering bullish convergence condition in 4H MACD, firm break of 1.0435 will confirm short term bottoming, and turn bias back to the upside for stronger rebound. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:50 | JPY | Money Supply M2+CD Y/Y Dec | 1.30% | 1.20% | 1.20% | | 07:00 | GBP | CPI M/M Dec | 0.30% | 0.40% | 0.10% | | 07:00 | GBP | CPI Y/Y Dec | 2.50% | 2.70% | 2.60% | | 07:00 | GBP | Core CPI Y/Y Dec | 3.20% | 3.40% | 3.50% | | 07:00 | GBP | RPI M/M Dec | 0.30% | 0.70% | 0.10% | | 07:00 | GBP | RPI Y/Y Dec | 3.50% | 3.70% | 3.60% | | 07:00 | GBP | PPI Input M/M Dec | 0.10% | 0.20% | 0.00% | | 07:00 | GBP | PPI Input Y/Y Dec | -1.50% | -1.30% | -1.90% | -2.10% | | 07:00 | GBP | PPI Output M/M Dec | 0.10% | 0.10% | 0.30% | 0.40% | | 07:00 | GBP | PPI Output Y/Y Dec | 0.10% | 0% | -0.60% | -0.50% | | 07:00 | GBP | PPI Core Output M/M Dec | 0.00% | 0.00% | | 07:00 | GBP | PPI Core Output Y/Y Dec | 1.50% | 1.60% | | 10:00 | EUR | Eurozone Industrial Production M/M Nov | 0.20% | 0.30% | 0.00% | 0.20% | | 13:30 | CAD | Manufacturing Sales M/M Nov | 0.80% | 0.50% | 2.10% | 1.30% | | 13:30 | CAD | Wholesale Sales M/M Nov | -0.20% | -0.70% | 1.00% | | 13:30 | USD | CPI M/M Dec | 0.40% | 0.30% | 0.30% | | 13:30 | USD | CPI Y/Y Dec | 2.90% | 2.90% | 2.70% | | 13:30 | USD | CPI Core M/M Dec | 0.20% | 0.20% | 0.30% | | 13:30 | USD | CPI Core Y/Y Dec | 3.20% | 3.30% | 3.30% | | 13:30 | USD | Empire State Manufacturing Jan | -12.6 | -1.8 | 0.2 | | 15:30 | USD | Crude Oil Inventories | -1.0M | -1.0M | | 19:00 | USD | Fed's Beige Book |
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