Friday September 17th, 2021

The US$ and oil dips, while equity markets and US yields are higher. Yesterday’s US retail sales figure showed an unexpected increase reviving expectation for an early tapering. The US$ index is down slightly but near three-week high of 92.965. The Michigan Consumer Sentiment Index will be released later this morning expected to be 72.2 after last month 10-year low reading of 70.3. In other news, Biden expects Congress to approve spending, infrastructure bills, he also convened world leaders to discuss climate change ahead of Glasgow summit. COVID, the British government is considering easing COVID-19 rules for international travel. South Korea approves Celltrion for COVID treatment. In currency markets, CNY is flat on the day while other Asian currencies are down (JPY down 0.23%, KRW down 0.20%, THB down 0.30%). AUD up 0.23% while NZD up 0.10%.

Expectations for an early policy tightening by the Fed coupled with a softer tone around crude oil prices could continue to provide support for the USD. Election uncertainty remains as the Liberals and Conservatives are in a statistical dead heat. Support remains at 1.2625, while resistance holds at 1.2720.

Euro CPI came in as expected this morning. ECB’s Governing Council member Kazaks said that there is no reason to expect permanently hot inflation, while his colleague De Cos says that market do not foresee a rate hike in 2023. Support remains at 1.1760, while resistance holds at 1.1840.

EURGBP has bounced off the mid-July lows of .8500 helped by the weak UK Retail Sales number. Support holds at .8500 (1.1765) while resistance resets to .8600 (1.1628) if breached look to .8650 (1.1560).

GBP/USD broke through the 1.3800-mark after UK’s dismal Retail Sales figures (down 0.43% – expected up 0.5%). Support holds at 1.3785 and while resistance resets at 1.3900.