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HotForex Analysis by Dr Nektarios Michail - 1d ago

The week starts light, with a bank holiday in the US, but builds up rhythm as Japan releases its trade balance data on Tuesday, while the FOMC minutes are the event of the week on Wednesday. Thursday is a big day for US data, with many releases scheduled, while, on Friday, Japanese inflation and Canadian Retail Sales are out.

Monday – 18 February 2019

  • US President’s Day (Full Day) – No stock trading session in the US on account of the President’s Day.

Tuesday – 19 February 2019

  • RBA Minutes (AUD, GMT 00:30) – The RBA minutes will provide more insight on the views the Australian Central Bank has about the economy.
  • Average Earnings and Unemployment (GBP, GMT 09:30) – Earnings are expected to have grown by 3.4% in the last quarter of 2018, while the ILO Unemployment Rate for the 3 months to December is expected to have declined to 3.9%.
  • Trade Balance (JPY, GMT 23:50) – Japanese imports are expected to have increased by 3.7% y/y in January, compared to 1.9% in December, in expectation of higher domestic consumption. Exports are expected to have declined by 1.9% y/y in January. Overall, the trade balance is expected to have improved in January.

Wednesday – 20 February 2019

  • Wage Price Index (AUD, GMT 00:30) – Australian wages are expected to have increased by 0.6% q/q in the final quarter of 2018, at the same level as in 2018Q3.
  • FOMC Minutes (USD, GMT 19:00) – FOMC minutes, detailing the view of each of the Fed Governors and FOMC Members shed light on their perspectives over the future of the US economy.

Thursday – 21 February 2019

  • Employment Data (AUD, GMT 01:30) – Employment is expected to have increased by 15K in Australia in January, compared to 21.6K in December. The unemployment rate is expected to have remained at 5%.
  • All Industry Activity Index (JPY, GMT 04:30) – Japanese industry activity is expected to have grown by 0.5%, compared to a 0.3% contraction last month, indicating that the Japanese economy is slowly increasing consumption.
  • EU PMIs (EUR, GMT 09:00) – Both manufacturing and services February PMIs are expected to have remained at the same levels as in January.
  • Durable Goods and Philly Fed (USD, GMT 13:30) – Durable Goods release has been delayed by the US government shutdown and are expected to have increased by 0.2% m/m in December. Philly Fed Index is expected to remain on positive grounds, albeit decreasing to 14 compared to 17 in January.
  • US PMIs (USD, 14:45) – The Manufacturing PMI is expected to have declined to 54.7 in February, compared to 54.9 in January, while the Services PMI is expected to have remained unchanged at 54.2
  • Existing Home Sales (USD, GMT 15:00) – Home sales have regained their status as an important indicator after the financial crisis and can have a strong effect on the markets. The release is expected to record 5.05M compared to 4.99M in December.

Friday – 22 February 2019

  • National CPI Index (JPY, GMT 01:30) – The Japanese price index is expected to have increased to 0.8% on a y/y basis, compared to 0.7% on December.
  • CPI Inflation (EUR, GMT 10:00) – Core CPI inflation is expected to have grown by 1.1% y/y in January, the same level as December. CPI inflation is also expected to have increased by 1.4% y/y, the same growth rate as December.
  • Retail Sales (CAD, GMT 13:30) – Canadian sales are expected to have decreased by 0.2% m/m in December, compared to 0.9% m/m in November.

*Delayed data from the US Government shutdown is tentatively scheduled for next week.

Click here to access the Economic Calendar

Dr Nektarios Michail

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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HotForex Analysis by Dr Nektarios Michail - 2d ago

Both UKOIL and USOIL are important in the energy sector, as they reflect the two most important types of Oil: UKOIL refers to the Brent crude which is extracted from the Oil fields in the North Sea, and USOIL refers to Western Texas Intermediary (WTI) which is extracted from the Oil fields in the United States. UKOIL is the reference Oil price for about two-thirds of the oil traded around the world, while WTI is, expectedly, the dominant benchmark in the US.

The main differences between the two types relate to their API Gravity, i.e. how light or heavy they are, and their sulfur content. Both WTI and Brent are considered to be light crude oils, however, the former is lighter than the latter. In general, the lighter the crude oil, the higher the price as they produce a higher percentage of gasoline and diesel fuel per barrel of crude oil when converted into these products by a refinery. Regarding sulfur, WTI’s content is lower than that of Brent’s, even though both belong in the sweet crude oil category, making them easy to refine and safer to extract than sour. By contrast, crude produced by OPEC countries tends to be relatively sour.

Overall, WTI is both lighter and sweeter than Brent, which should make it more expensive given that it can refined into fuel more easily. Given that WTI is mostly landlocked though, and thus not easily transferred, prices for both types of Oil have always traded at more or less the same levels, at least until 2011. Since then, the Shale Oil revolution has changed the world of refining by providing even lighter oils for processing. Remember that WTI was mainly refined within the US, given that the country had been a net importer of Oil for the past 75 years. This forced refineries to be built in a way that accommodated both Brent and WTI, where the former represented the bulk of foreign imports and the latter represented domestic production.

The problem with Shale oil is that it is too light to be refined and thus they have to mix it with heavier crude (such as Venezuelan oil) in order to be able to process it. Given that exports from the US were not allowed, the boom in the Shale Oil production forced the country into overabundance, and thus pushed the WTI price lower. This was more or less resolved in December 2015, when the ban on US crude Oil exports was lifted. This pushed the Brent-WTI price differential close to zero, a level which was more or less maintained until mid-2017, whereas prices once again diverged by more than $5.

After the effect from the lifting of the US Oil export ban subsided, what mattered most was proximity. Given that the US is not as close to the countries which have significantly increased demand (notably Asia and Africa) over the past years, the increased cost of shipping WTI from the US to China or Bangladesh would make it far cheaper to ship it from the Middle East, as travel time would be halved. As already noted, Brent prices are used in the Middle East.

Thus, as demand for Oil increases in Asia, and given that the US is closer to Europe whose demand for Oil has been declining, Brent-based contracts are likely to dominate the markets in the coming years. As such, the spread between Brent and WTI is also likely to continue its increase, even though the level is likely to be affected by other factors as well.

Still, that does not mean that the spread is always meaningful: there are times when the markets may overdo it with the spread which then returns sharply down. June 2018 is a good example, with the spread jumping to $10 in the first 10 days of the month, only to return to $3 in the first days of July. The inverse relationship is also statistically valid, as a regression analysis using daily data from January 2018 until now suggests that the spread’s value in the previous day has a statistically significant negative effect on the Brent price, with the coefficient standing at 0.05.

Note that any type of such statistical analysis is unlikely to be able to fully capture the extent of the relationship. The formula would interpret a drop in the Brent price following a decline in the spread as evidence of a positive relationship, something which could have just happened on a whim, or because the market realized that Brent was overpriced, or even that Brent declined by more than WTI on days during which the spread was high.

This is what happened during the June-August 2018 period, when the price of WTI increased by more than the Brent price, in the lead-up to the end of June, with the spread between the two remaining relatively stable for a month. Then, after mid-July the spread rose again reaching around $7 by the end of August.

Using the Brent-WTI spread and its 20-day, 50-day, and 200-day MAs, the 20DMA peaked on June 22, and indicated a turnaround from the June highs on July 05, at which point the 20DMA crossed the 50DMA. A further confirmation arose when the 20DMA crossed the 200DMA on July 13, however, this should have been viewed with caution as the spread closed on its 200DMA. At the moment, the spread appears to be heading downwards, with the 20DMA crossing the 50DMA on November 29, 2018. The two MAs appeared to have been converging, however, an unexpected decrease in the spread pulled the 20DMA down again.

Importantly, the spread can provide valuable information for traders. As suggested above, an increase in the spread suggests either Brent is over-reacting or WTI is under-reacting to an overall Oil market movement. As such, if the spread is expected to increase, traders could position themselves to gain from this in a simple way: if Oil prices are increasing, knowing that the spread will increase suggests that UKOIL is expected to make a bigger move than USOIL and thus it would be more profitable to trade it. To sum this up, have a look at the following table: if we are seeing a bear market, then expectations of an increase in the spread would imply a USOIL over-reaction. On the other hand, if we expect that the spread will decrease, this would imply a UKOIL over-reaction.  On the other hand, if Oil prices are increasing and the spread is decreasing then USOIL is expected to make a larger move than UKOIL.

Overall, understanding where the spread is headed can provide the trader with important information regarding the instrument which is likely to make the biggest move. Knowing this, can make the trader more equipped to pick an instrument for his/her position; at the same time, proper risk management is very important.

Click here to access the Economic Calendar

Dr Nektarios Michail

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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HotForex Analysis by Stuart Cowell - 2d ago
EURUSD, H1

EURUSD has settled in the upper 1.1200s, holding comfortably above the three-month low that was seen at 1.1249 yesterday. The pair has been propped up in the wake of the U.S. retail sales miss, which portends downside risk to the economy, although there has also been evident slowing in the Eurozone economy. While the Fed recently made a hawkish-to-neutral policy shift in terms of forward guidance on Fed funds rates, tightening is stilling happening via the Fed’s ongoing post-QE balance sheet shrinking. This suggests the fundamental bias will be for declines in EURUSD. Resistance comes in at 1.1320, and support at 1.1249-50. The 20-month low seen last November, at 1.1215, provides a extension. Expectations are that today’s US data slate to be neutral-to-positive for the dollar.

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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The UK government lost another vote in the House of Commons adding pressure to the Pound and Mrs May. UK Retail Sales later are expected to show some signs of cheer.

GBP in Focus - Brexit and Retail Sales | 15.02.2019 - YouTube

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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HotForex Analysis by Dr Nektarios Michail - 2d ago
FX News Today
  • USD under pressure from that weak data yesterday, as US retail sales mix has revived concerns about the global growth outlook and without tangible results, markets seem unwilling to invest any more in trade talk hopes.
  • Euro slipped under 1.1300 (1.285), as Germany’s flirt with recession has also shifted the focus to flagging growth in Europe, which has its own trade dispute with the US.
  • GBP pressured from another lost Brexit vote for the Government, moving under 1.2800.
  • Overnight Chinese CPI and PPI both missed expectations and Japanese Industrial Production remained woeful. Gains in AUD (under 0.7100) and NZD (0.6825) were reduced.
  • Stock markets closed narrowly mixed on Wall Street with the USA100 managing a slight gain, while USA30 and USA500 were pressured by disappointing Retail Sales.
  • In Asia most markets headed south, with Chinese indices underperforming. CSI and Shanghai Comp had rallied in recent sessions on hopes that another round of punitive tariffs could be avoided and that Trump would push out the March 1 deadline to give talks more time to progress, but the blue chip CSI 300 lost 1.58% today and the Shanghai Comp lost 1.13%, while the tech hub of Shenzen outperformed slightly, but also declined by 0.27%. The JPY dropped to 110.28 while Topix and Nikkei closed with losses of 0.79% and 1.13% respectively and the Hang Seng declined by 1.86%.
  • US futures are also broadly lower, suggesting a somber close to the week. Oil prices tested the USD 55 per barrel mark before returning to $55.54 per barrel.
Charts of the Day Main Macro Events Today
  • UK Retail Sales – Retail Sales ex-Fuel are expected to have increased in January, to 3.0% y/y, compared to 2.6% in December.
  • US Industrial Production – Industrial Production is expected to have increased by 0.1% m/m in January, compared to 0.3% m/m in the previous month.
  • Michigan Consumer Sentiment – Sentiment is expected to have rebounded as markets anticipate that the preliminary reading will see it increase from 91.2 in January to 93.0 in February.

Click here to access the Economic Calendar

Dr Nektarios Michail

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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The Dollar fell following the mix of data, where retail sales were way under expectations, PPI headline cooler, core hotter, and jobless claims higher than expected. EURUSD rallied to 1.1305 from 1.1270, while USDJPY fell under 110.55 from 111.05.

Big Miss for US Retail Sales hits USD | 14.02.2019 - YouTube

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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The Coca-Cola Company is one of the top global key players in the beverage industry based and established in the USA since 1886. The firm is in charge of the manufacturing (by franchisees), retailing and marketing of nonalcoholic beverage concentrates and syrups.

The billion-dollar beverage giant ranked by Forbes as the World’s 3rd Largest Public Company for 2018 in the beverage industry after Anheuser-Busch InBev and PepsiCo, reports its quarterly earnings later today prior to the open of the New York trading session.

The shares have been in high demand following the December low at $45.64, closing yesterday at $49.67, just a breath below the 6-year peak area at $50.00-$50.77 area (9-week high and 6-year high). The rally from December 26 represents a gain of some 9%, while Coca Cola shares were marked as one of the best performing Dow stocks over the last year with a nearly 19.5% increase since 2018’s low price at $41.52.

Regarding today’s earnings report release for Q4 2018, the consensus recommendation is “buy”, according to a poll of analyst by Reuters, with 13 out of 24 analysts having a Buy recommendation for the stock (the rest a Hold recommendation) with a median target of around $51.50 and mean target at $52.02 as given by Thomson Reuters Eikon. (2018).

Coca Cola (NYSE:KO) is expected to have $0.49 in Earnings Per Share for Q4 according to Reuters which represents a nearly 25% since the reported EPS a year ago. The ZacksInvestment on the other hand suggests an EPS at $0.43, which represents a nearly 10% since the reported EPS a year ago. Meanwhile, QTR Revenue is expected to be released at $7.03 billion, which will end the fiscal year with $31.91 billion, based on Forbes forecasts.

The Coca Cola earning report for Q4 is expected to present growth for the company, as despite the world’s health concerns over soda consumption the last few years, the company is likely to continue benefiting from the introduction of a renovated Coke Zero into Coca Cola Zero Sugar during Q3 2017. The company faced an impressive increase of its revenue, due to the spike in sales of Zero Sugar.

Meanwhile, the deleverage is ready to innovate new flavors effective by February 25. As he company reported, they will offer Orange Vanilla Coke and Orange Vanilla Coke Zero Sugar in the US market. After over a decade, the company is offering a new flavor under its trademark Coca-Cola brand. Nevertheless, another factor that could positively affect the company’s earnings could be the large-scale re-franchising of the company’s bottling business, coupled with lower tax expense for the year, as Forbes stated.

Technically, the current Coke price action has posted a reversal of more than 76.4 % of the losses seen since November 2018. The price declined in 2018 due to consumer health concerns that reduced demand and a surge in production but also due to the $40 million reinvestment  of cost savings in Australia.

This rebound from $45.20 lows in December, has turned the medium term outlook to a positive one. The stock is trading in the upper Bollinger Band pattern (weekly and daily) holding a floor above the 23.6% set since 2012 drift, for a 5th month in a row.

Immediate Resistance holds at the round $50.00 level, while a break of it, along with the increasingly improving Momentum indicators, suggests that there is plenty of underlying demand to protect the asset and to boost it to a 6-year high at $50.77.

In the daily chart, RSI has flattened at 60 area, while MACD lines have crossed higher indicating an increasing positive momentum in the near future. Immediate Support for the asset is set at $49.45 (last week’s peak). Next Support holds at $48.80, the 61.8% Fib. level.

Click here to access the Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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HotForex Analysis by Dr Nektarios Michail - 3d ago
FX News Today
  • 10-year Treasury yields are up 0.2 bp at 2.704% and JGB yields fell back -0.8 bp to -0.025% as the rally on stock markets faded.
  • Wall Street still closed with slight gains, but there wasn’t enough momentum to sustain a further broad move higher in Asia.
  • Topix and Nikkei closed little changed, the Hang Seng is down -0.26% while CSI 300 and Shanghai Comp are up 0.33% and 0.13%, after Chinese data showed a rebound in exports at the start of the year.
  • The tech hub of Shenzhen outperformed with a gain of 0.93%, but the ASX also closed with a marginal loss.
  • US futures as well as European futures are moving higher though, so there is still some life in markets after reports that the U.S. is considering delaying China tariffs for 60 days. President Trump had already told reporters that trade talks are making good progress.
Charts of the Day Main Macro Events Today
  • EU GDP – The common currency’s GDP is expected to have grown by 1.2% y/y on the final quarter of the year, the same growth rate recorded in Q3.
  • US Retail Sales – One of the most important indicators of consumption, Retail sales ex Autos are expected to have grown by 0.1% m/m in December, compared to 0.2% m/m in November.
  • US PPI Inflation – In accordance to the slowdown picture in the US, PPI inflation is expected to have slowed to 2.5% y/y in January, compared to 2.7% y/y in December.
  • US Jobless Claims – Continuing Jobless Claims are expected to have increased to 1.74M on the week ending at January 8, compared to 1.736M last week. Initial Jobless Claims are expected to have decreased to 225K compared to 234K on the previous week.
Support and Resistance

Click here to access the Economic Calendar

Dr Nektarios Michail

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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As China has returned from the week-long Chinese New Year celebrations, it is ready to report some important indicators for its economic growth. January’s trade data are due tomorrow and Inflation is due on Friday.

The trade balance in particular is expected to see the surplus narrow sharply to $33.5 bln after it gapped out to $57.1 bln in December, the highest in 3 years.

In December, imports contracted at a 7.6% y/y rate to end the year, with exports falling -4.4% y/y. Both of those were the first declines since March 2018, and were the weakest since October 2016, probably weighed by US tariffs and weaker commodity prices. Erosion could be extended into January for those same reasons, which would be consistent with ongoing slowing in China’s domestic economy (falling imports) and the impact of the trade war with the US (drop in exports). January imports are expected to decline by 10% y/y and exports to drop by 3.2% y/y.

On Friday, January’s inflation is likely to tick up to 2.0% y/y from 1.9%, while January PPI is seen at 1.0% y/y from 0.9%.

Meanwhile from the markets’ perspective, recent comments from US President Donald Trump who suggested that he could see letting the March 1 deadline on tariffs China slide a little if the two sides were close to a complete deal, helped to underpin sentiment.

Click here to access the Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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HotForex Analysis by Dr Nektarios Michail - 4d ago

On the announcement of the January CPI results, Sterling jumped 66 pips, with the market interpreting the lower than expected price growth as a positive signal for the UK economy. In particular, the overall idea is that lower price pressures are a sign that the UK economy is finally adjusting to its post-Brexit path. However, this is not the case. In fact, what the inflation results underline is the UK economy’s reliance on the exchange rate and the fact that high prices persist in the economy.

Let’s start with the 0.3% reduction in headline CPI inflation, contrasted with the core (i.e. excluding food and energy) inflation rate remaining at 1.9%. This, first and foremost, suggests that only the food and energy parts were affected and thus there has been no effect on the real economy.

The same holds for the RPI, which is the index many goods in the UK economy are linked to. To explain the decline all we have to employ is the exchange rate and the price of Oil. In particular, the GBPUSD exchange rate averaged at 1.258 in January 2019, 9% lower than the 1.382 rate that persisted a year ago, attributed to the interest rate differential between the two countries. In contrast, the price of Oil stood at $57.5 in January 2019 and $66.8 in January 2018, a 13.7% annual decrease. That means that, a barrel of Oil cost GBP 45.71 in January 2019, compared to GBP 48.33 in the same month last year. Thus, Oil costs have decreased by 5%, which, considering Oil’s weight in the RPI, would result in an overall decrease in prices by about 0.19% – which is almost exactly the rate at which the RPI has declined since last year.

Overall, there appears to have been no improvement stemming from the UK itself as the observed changes are linked to the price of Oil and the exchange rate. At the moment, markets appear to have understood this, as prices have moved back below the 1.2919 Resistance level, currently trading around the 1.29 level. If that Support level is broken then the next move should be towards the 1.2832 level (Fib. 0.0%).

Click here to access the Economic Calendar

Dr Nektarios Michail

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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