Forexlive Americas FX news wrap 16 Jan: Feds Waller more dovish. Retail sales solid.

• A down day for the major US indices
• Biden Administration does not plan to take action on TikTok on Sunday
• Crude oil settled at $78.68
• Fed’s Goolsbee: Has grown less concerned about labor market slowdown
• BOC Granvelle:A Trump tariff on exports would have big negative impact on economic growth
• The World Bank forecasts global growth of 2.7% in 2025 and 2026, unchanged from 2024
• Atlanta Fed GDP now Growth estimate for Q4 rises to 3% from 2.7% last
• Pres Elect Trump considering executive order to circumvent the TikTok ban
• European indices closes day mostly higher. France’s CAC outperforms. Spain’s Ibex doesn’t.
• Tr Sec. nominee Bessent:Will revive American economy through progrowth regulatory policies
• Fed Waller: December inflation data was very good
• NAHB price index for December 47 versus 45 estimate
• US business inventories for November +0.1% versus 0.1% estimate
• Kickstart the FX trading day for Jan 16 w/ a technical look at EURUSD, USDJPY & GBPUSD
• Philadelphia Fed manufacturing index for January 44.3 versus -5.2 estimate
• US December retail sales 0.4% versus 0.6% estimate.Control group versus 0.7% estimate 0.4%
• US December import prices MoM 0.1% vs 0.1% expected
• US initial jobless claims 217K vs 210K expected
• ForexLive European FX news wrap: Dollar mixed ahead of more US data to come

The control group of retail sales came in stronger than expectations at 0.7% vs 0.4% estimate which took some of sting out or the headline figure coming in less than expectation at 0.4% vs 0.6%. The control group data is what flows through to the GDP data each quarter. True to form the Atlanta Fed GDPNow model ticked up to 3.0% for the 4Q from 2.7% previously.

In other data releases in the US session

• Initial jobless claims were higher than expectations to 217K vs 210K est. HOwever, the 4-week MA did dip slightly to 212.75k. Continuing claims did come in lower than expectations at 1.859M underscoring an employment picture that remains on solid grpund
• Philly Fed Manufacturing index rose sharply to 44.3 from -10.0 last month and much higher than the -5 est. You have to wonder if pre-planning for tariffs and/or a more favorable business environment led to the gain. The 6 month forward index also increased from 46 from 33 last month indicative of increased business confidence in the region.
• THe NAHB home price data was steady to slightly higher than expected at 47 vs 45, and the business inventories came in as expected.

Federal Reserve Governor Christopher Waller, speaking on CNBC, expressed optimism about December’s inflation data, describing it as “very good.” He said that while 12-month indicators show limited progress on inflation overall, that six of the last eight months have been on target, suggesting the trend may continue. If data remains favorable, rate cuts could be considered in the first half of the year, with three to four cuts possible depending on economic conditions.

Waller acknowledged the potential for surprises, similar to last year, that could delay rate cuts but remains optimistic about disinflation progressing toward the target. He also highlighted that the strong jobs report was a rebound from earlier weaker data, and while the labor market is solid, it is not overheating. On tariffs, Waller stated they are unlikely to cause significant inflationary effects. He concluded by stating he might be more optimistic than some of his colleagues at the Fed regarding inflation trends aligning with the target.

The debt market was having more of the Waller dovish comments vs the solid economic data (at least today). The 2 year yields is at 4.236%, down -2.8 basis points. The 10 year, which traded as high at 4.809% earlier this week, is back dwon at 4.61% down -4.0 bais points on the day.

US stocks were not all that encouraged with the 3 major indices closing lower on the day. The Nasdaq was the hardest hit with Apple losing 4% on reports that it lost it’s top selling spot in China due to slower to adopt AI in their cell phones.

• Dow fell -0.16%
• S&P fell -0.21% and
• Nasdaq fell -0.89%

European shares moved higher led by France’s CAC which rose 2%.

Gold added to it’s gains with a rise of $18 or 0.68% to $2714. The price is up for the third day in a row after tumbling -$27 on Monday. Since than the price has risen $51.

Bitcoin is back below 100K after closing at $100,512 yesterday. The price is trading at $99,959, just below the $100K level. The low price today reached $97,319.

The USD is closing mixed vs the major currency pairs today. The greenback was the strongest vs the CAD (+0.36%) and the weakest vs the JP)Y (-0.85%). The other changes showed modest gains or losses from 0.03% to 0.22%.

• EUR, -0.12%
• JPY, -0.85%
• GBP +0.04%
• CHF -0.24%
• CAD +0.37%
• AUD +0.27%
• NZD +0.16%

This article was written by Greg Michalowski at www.forexlive.com.