Tuesday January 15th, 2019

Today US Core Producer Price Index, an important indicator of overall inflation, will be announced for December 2018. The Year-over Year rate is expected to be 2.5%. While the PPI has been steadily increasing for 3 years peaking at 3.5% a few months ago, it has been declining steadily since then. This is one of the reasons the Fed has decided to moderate its tightening policy. If the PPI is lower than 2.5% look for the USD to sell off today.

In Canada home prices for December fell 0.2% for the third straight month primarily in Vancouver and Edmonton. With the Bank of Canada’s five rates hikes last year along with tighter mortgage rules this softening trend is expected to continue. Look for oil prices and CAD to weaken after recent strength.

China announced a contraction in the amount of its imports and exports reflecting a weaker economy. The Bank of China has lowered bank reserve ratios in an attempt to restart economic growth. The market is worried about slower global growth.

In the UK the Brexit agreement with the EU will be voted on in Parliament today sometime between 2pm – 4pm EST. Expect Sterling to rally if it passes.