The Michigan sentiment downtick to 98.1 trimmed the election-fueled surge to a 98.2 cycle-high in December and 93.8 in November from the 2-year low of 87.2 in October. The index has dropped back to the 98.1 prior cycle-high in January of 2015 that had marked the strongest reading since January of 2004. The pattern of upward revisions in “final” Michigan sentiment reports has disappeared, given boosts in just 8 of the last 18 months, and an average revision in 2016 of just 0.1 despite a big 2.2 November boost that was election-related. For other surveys, the IBD/TIPP index rose to a 55.6 new cycle-high in January from a 54.8 prior cycle-high in December. The Bloomberg Consumer Comfort index has averaged 45.3 over the first two weeks of January, following prior averages of a 45.8 cycle-high in December and 45.1 in November, versus a 45.7 prior cycle-high average in April of 2015.
The 0.7% U.S. November business inventory surge after a 0.1% (was 0.2%) October drop matched estimates, leaving a 1.6% nine-month price-led rise since February. We saw a 1.0% pop in retail inventories that matched the rise from the advance indicator report, alongside a 0.2% already-reported rise for factories and a 1.0% wholesale increase that beat the 0.9% advance figure. We still expect Q4 GDP growth of 1.6% with a $21 bln inventory addition and a still-lean $29 bln accumulation rate that extends the $16.5 bln addition in Q3, as inventories are now reversing a big five quarter inventory headwind that culminated in a $9.5 bln liquidation rate in Q2. Risk for the economy can be seen in the lofty inventory-to-sales (I/S) ratio, which rose to 1.38 in November from 1.37 in October but the same 1.38 in September, leaving the ratio only modestly below the 1.41 expansion-high over the three months of Q1.
The dollar was unmoved by the business inventory and Michigan sentiment data, where the latter was shy of expectations. The greenback remains at or near session highs versus major currencies, with the post-Trump press conference disappointment apparently now fully running its course.
/ has had a good start to 2017 with all four trades achieving at least target 1 for a total net gain of 736 pips.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.
Click HERE to register the next webinar will start in:
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.