Friday’s Inflation Data Weighs, Solid Data from China

US Dollar Index Sinks

The Consumer Price Index numbers did not match expectations on Friday as the core number came in flat. This caused an immediate reaction from U.S investors who now believe the Federal Reserve will have to remain cautious because inflation numbers are not only falling short of expectations, but are potentially de-accelerating. The U.S Dollar got weaker on the heels of the inflation data, but Wall Street did gain. The Empire State Manufacturing Index will be published today.

Solid Data from China, BoJ Meeting on Tap

China produced a solid Gross Domestic Product outcome this morning and its Industrial Production significantly beat expectations with a gain of 7.6%. The strong economic data from China has helped the Shanghai Shenzhen composite gain cautiously this morning. The Hang Seng has continued to see steady buying. Japan is on holiday today, but later this week the Bank of Japan will conduct its monetary policy meeting. The Yen has been stronger against the U.S Dollar this morning.

European Inflation Figures Today

Final Core Consumer Price Index data will come from the European Union this morning. The European Central Bank monetary policy meeting will be this Thursday, investors will be keen to hear from President Mario Draghi to see if he continues his rather aggressive tone about a tightening of policy in the coming year. The Euro gained on Friday against the U.S Dollar in a cautious manner, but the Pound did make large gains and is near the 1.31 level against the U.S Dollar as trading begins today.       

Gold Breaks Key ST Resistance

Gold gained on Friday, when the U.S inflation numbers produced a weaker number. However, this could also create a readjustment among speculators who have been betting on an increase of global inflation. Gold is near 1230.00 U.S Dollars and traders should be prepared for volatility this week from the precious metal.

Yaron Mazor is a senior analyst at SuperTraderTV.

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