Fundamental analytics

US consumer inflation data in focus

Optimism amanating from trade negotiations between US and China, combined with a strong rally in the oil market, helped to maintain positive sentiment in the global securities market. MSCI Asia Pacific Index gained today, summing up the eighth session in the last ten trading days, while the Euro Stoxx 50 in Europe is approaching four-week highs. US index futures traded in the green indicating a positive start to the Wall Street on Friday. The dollar is still locally weaker against all major currencies, except sterling. During the week, USD dollar moved under pressure after a change in expectations for 2019 Fed's policy.

The main positive results of trade negotiations are Chinese Vice Premier Liu He intention to travel to Washington at the end of the month and meet with US Trade Representative and Finance Minister Mnuchin for the next round of trade negotiations.

UK reported disappointing data on trade and industrial production for November, but stronger data on the services sector that raised monthly GDP levels above expectations. The focus of the current trading session will be drawn to data on US consumer inflation. Lower energy prices are likely to put pressure on inflation, which will be reduced from 2.2% in November. However, the base rate is likely to remain unchanged. Rising inflation will support the US currency and vice versa weaker data will put additional pressure on the locally weak dollar. In any case, we expect an increase in volatility in today's US trading.