Earlier in the Day:

It was a relatively quiet day on the Asian economic calendar this morning. The Kiwi Dollar was in action, with electronic card retail sales in focus early in the day.

With stats on the lighter side, the markets also reacted to the signing of the U.S – China phase 1 trade agreement.

For the Kiwi Dollar

Electronic card retail sales slid by 0.8%, month-on-month, in December, partially reversing a 2.9% rise in November. Economists had forecast a 0.2% fall.

According to NZStats,

• Consumers spent less on long-lasting goods such as furniture, hardware, and appliances after a jump in November.

• Across the 6 retail industries, spending fell in 4. The sales of furniture, hardware, appliances, and sports and recreational goods fell by 2.5%.

• Fuel (-1.3%) and clothes and shoes (-1.9%) sales also fell in December.

• Spending on food and beverage services and accommodation (0.4%) and sales of groceries and liquor (0.2%) saw minor gains.

• Year-on-year, sales were up 3.9%, coming in well ahead of a forecasted 2.1% rise.

The Kiwi Dollar moved from $0.66144 to $0.66168 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.20% to $0.6631.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.01% to ¥109.91 against the greenback, while the Aussie Dollar was up by 0.13% to $0.6911.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar, with finalized German inflation figures for December due out.

We expect the numbers to have a muted impact, however, with focus likely to be on the phase 1 trade agreement.

Car registration figures will garner some attention, however, with numbers due out of France, Germany, and Italy.

With tariffs in place and forecasts from China negative for car sales, any hint of U.S tariffs on EU goods would weigh heavily. The U.S President will be looking to detract the markets and the news media from the impeachment trial…

On the monetary policy front, while the ECB meeting minutes are due out, ECB President Lagarde may draw greater interest late in the day. The ECB President is scheduled to speak after the European close.

At the time of writing, the EUR was up by 0.04% to $1.1154.

For the Pound

It’s a quiet day ahead on the economic calendar, with no material stats due out of the UK to provide the Pound with direction.

Economic data has been particularly disappointing this week, raising the chances of a rate cut at the end of the month.

In spite of the doom and gloom, however, the Pound has managed to hold onto $1.30 levels. Any upside is expected to remain capped though, with uncertainty over Brexit and sentiment towards monetary policy negatives.