Summary:
- Oil hits 2-week high after unexpected DOE drawdown
- GBP slides after UK GDP disappoints
- USDCAD hits 2-week high after Canadian retail sales
- Euro little changed after ECB minutes
- Technical overview of Gold
- Bitcoin falls back to 10,000
The latest inventory figures from the department of energy have given the oil price a boost with Brent rallying to its highest level since the beginning of the month. The weekly reading showed the first decline in 4 weeks with a print of -1.6M and against consensus forecasts for 2.2M this is clearly a positive surprise for the market. The oil price reacted positively to the release with Brent Oil hitting its highest level in a fortnight and gaining around 100 ticks to move above the $66 handle.
UK economy grew less than initially expected during the final three months of the past year as consumers slowed down their spending due to heightened inflation. Growth in the fourth quarter in a year-over-year basis proved to be the weakest since mid-2012 while other peers in G7 expanded at a much better pace. The British pound slipped in the aftermath of the release but it ran into an important support therefore bears could need a bit more time to resume moving lower.
The Canadian retail sales for December showed an unexpected decline, and offer further support to the idea that seasonal shopping habits are changing. The headline reading showed a drop of 0.8% m/m against a consensus for unchanged and even though the prior reading was revised higher by 0.1% to 0.3% it is undoubtedly a negative shock. The Canadian dollar fell sharply on the release with USDCAD hitting a 2-month high but the Loonie has recovered a little into the European close.
The account of the January’s ECB meeting did not bring any new clues with regard to monetary policy or the latest strength of the shared currency. As a result, the euro made just a brief jump higher erasing it subsequently.
Following the strengthening of the USD gold prices made a tremendous turnaround. After the biggest weekly gain in almost 2 years gold reversed this week erasing roughly all of its last week’s advance. A technical overview of Gold can be found here.
Crypto markets are experiencing some selling today with Bitcoin dropping back below the 10,000 level. Over the past several hours we did not get any crucial revelations which could influence Bitcoin but the interesting story may be found in Venezuela where the country has reportedly raised as much as $735 million in the first day of a sale for its controversial “petro” cryptocurrency.