• Inflation Expectations Rallying to 2%

• Concerned by Low Labor Force Participation Levels

• Labor Market 'Strong,' Essentially at 'Full Health'

• Rate Outlook Depends on Economy's Performance

• Fed Likely to Raise Rates Three Times in 2017

EUR/USD 1.0550 (EUR 1bln) 1.0640-55 (1.1bln) 1.0700 (751m)

USD/JPY 113.35 (USD 300m) 114.00 (893m) 114.10-15 (436m)

GBP/USD 1.2000 (GBP 410m)

EUR/GBP 0.8700 (EUR 300m)

EUR/JPY 120.95-121.00 (EUR 535m)

AUD/NZD 1.0500 (AUD 1bln)

Retail sales rose for the fourth consecutive month, edging up 0.2% to $45.2 billion in November. Higher sales at motor vehicle and parts dealers and building material and garden equipment and supplies dealers were the main contributors to the gain.

Sales were up in 5 of 11 subsectors, representing 45% of total retail trade.

After removing the effects of price changes, retail sales in volume terms increased

Sales were up for the third consecutive month at motor vehicle and parts dealers (+0.8%) in November. Higher sales at new car dealers (+1.9%) accounted for most of the gain at the subsector level. Sales at other motor vehicles dealers, which include retailers of recreational vehicles, motorcycles and boats, were up 1.8%. Lower sales were reported at automotive parts, accessories and tire stores (-11.0%) and used car dealers (-3.5%).0.7%.

The Consumer Price Index (CPI) rose 1.5% on a year-over-year basis in December, following a 1.2% gain in November.

Prices were up in seven of the eight major components in the 12 months to December, with the transportation and shelter indexes contributing the most to the year-over-year rise in the CPI. The food index declined on a year-over-year basis for the third consecutive month.

The transportation index rose on a year-over-year basis for the fifth consecutive month, up 3.0% in December, after a 1.4% gain in November. This increase was led by gasoline prices, which increased 5.5% in the 12 months to December, following a 1.7% decline in November. At the same time, the purchase of passenger vehicles index rose less year over year in December (+2.6%) than in November (+3.0%), and the air transportation index registered its largest year-over-year gain since August 2013.

EUR/USD

Offers: 1.0685 1.0700 1.0720-25 1.0750 1.0785 1.0800

Bids: 1.0650 1.0625-30 1.0600 1.05801.0565 1.0550 1.0520 1.0500

GBP/USD

Offers: 1.2380 1.2400 1.2420 1.2450 1.2475-80 1.2500 1.2520 1.2550

Bids: 1.2320-25 1.2300 1.2280 1.2250 1.2230 1.2200 1.2185 1.2150 1.2100

EUR/GBP

Offers: 0.8660 0.8680 0.8700 0.8730 0.8750 0.8780 0.8800

Bids: 0.8625-30 0.8600 0.8585 0.8550 0.8530 0.8500

EUR/JPY

Offers: 122.80 123.00 123.50 124.00 124.50 124.80 125.00

Bids: 122.30 122.00 121.80 121.50 121.00 120.80 120.50 120.00

USD/JPY

Offers: 115.00 115.20 115.35 115.55-60 115.80 116.00 116.30 116.50 116.80 117.00

Bids: 114.50 114.20 114.00 113.85 113.55-60 113.20 113.00 112.80 112.65 112.50

AUD/USD

Offers: 0.7565 0.7585 0.7600 0.7630 0.7650 0.7675 0.7700

Bids: 0.7525-30 0.7500 0.7480-850.7450 0.7430 0.7400

Информационно-аналитический отдел TeleTrade

"Price is in the process of completing its fourth consecutive up week. This aggressive bounce has negated the downtrend that began in September 2016 at 0.7486 (downtrend break confirmed by the recent close above 0.7095 - 61.8% retrace). This downtrend was material in magnitude but fell some 150-200 points short of our aggressive downside target at 0.6650/0.6700.

The upswing to date is yet to retest the broken uptrend channel at 0.7310/30. This is a likely interim target and level that must be broken if a more sustainable uptrend is to be maintained.

At this time we are comfortable targeting 0.7310/30 but prefer to take a wait and see approach to further gains depending upon the price response to this key resistance levels.

A weekly close above 0.7330 would imply a retest of the 2016 highs at 0.7403/0.7486".

Copyright © 2017 NAB, eFXnews™

Inflation expectations have been revised upwards for 2017 and 2018, largely because of higher oil prices. Longer-term inflation expectations remain unchanged at 1.8%.

Real GDP growth expectations have been revised upwards for 2017, but are unchanged for years further ahead further out.

Unemployment rate expectations have been revised downwards.

Estimates of the quantity bought in retail sales increased by 4.3% compared with December 2015 and fell by 1.9% compared with November 2016.

The largest contribution to the month-on-month fall came from non-food stores.

The underlying trend remains one of growth with the 3 month on 3 month movement in the quantity bought increasing by 1.2%.

Average store prices increased by 0.9% on the year and for all retailing excluding fuel prices increased by 0.1%; the first increase since June 2014.

Online sales (excluding automotive fuel) increased year-on-year by 21.3%, but fell on the month by 5.3%; accounting for approximately 15% of all retail spending.

During his speech today the minister of the Japanese economy, Nobuteru Ishihara stressed his confidence once again that the Bank of Japan will achieve 2% inflation. "The Ministry of Economy believes that the Central Bank will be able to accelerate inflation to the target level of 2%, while taking into account economic trends. Now the country's GDP recovered moderately together with the labor market and wage growth. Nevertheless, it is necessary to closely monitor the financial markets and the uncertainty in the external economy "- said Nobuteru Ishihara.

EUR/USD

Resistance levels (open interest**, contracts)

$1.0778 (2450)

$1.0745 (2225)

$1.0723 (442)

Price at time of writing this review: $1.0686

Support levels (open interest**, contracts):

$1.0633 (2045)

$1.0603 (1380)

$1.0560 (1407)

Comments:

- Overall open interest on the CALL options with the expiration date March, 13 is 55224 contracts, with the maximum number of contracts with strike price $1,0750 (3475);

- Overall open interest on the PUT options with the expiration date March, 13 is 66105 contracts, with the maximum number of contracts with strike price $1,0000 (4926);

- The ratio of PUT/CALL was 1.20 versus 1.21 from the previous trading day according to data from January, 19

GBP/USD

Resistance levels (open interest**, contracts)

$1.2608 (1392)

$1.2511 (1349)

$1.2415 (464)

Price at time of writing this review: $1.2363

Support levels (open interest**, contracts):

$1.2284 (744)

$1.2188 (1033)

$1.2091 (541)

Comments:

- Overall open interest on the CALL options with the expiration date March, 13 is 18014 contracts, with the maximum number of contracts with strike price $1,2800 (1466);

- Overall open interest on the PUT options with the expiration date March, 13 is 21944 contracts, with the maximum number of contracts with strike price $1,1500 (3222);

- The ratio of PUT/CALL was 1.22 versus 1.23 from the previous trading day according to data from January, 19

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

China's economy expanded at a faster pace in the fourth quarter on spending, while the full-year growth hit the weakest in 26 years, data from the National Bureau of Statistics revealed Friday, cited by rttnews.

Gross domestic product grew 6.8 percent in the fourth quarter, while economists expected the rate to stabilize again at 6.7 percent.

In 2016 as a whole, the economy expanded 6.7 percent, which was within the government's target of 6.5 to 7 percent. However, this was the weakest growth in 26 years.

Today's report on industrial production from China, published by the National Bureau of Statistics showed that industrial production, in December, year on year increased by 6.0%. However, the figure was a little lower than the previous value of 6.2% and economists' forecast of 6.1%.

This report shows the volume produced by the Chinese industrial enterprises, such as factories and production facilities. The decline in production volumes could have a negative impact on inflation, which may force the People's Bank of China to take measures aimed at easing monetary and fiscal policies.

In 2016 the index of producer prices for industrial products (domestic sales) for Germany fell by 1.7% on an annual average from the preceding year, as reported by the Federal Statistical Office (Destatis). A year before the index had fallen by 1.8%.

In December 2016 the index of producer prices for industrial products rose by 1.0% compared with the corresponding month of the preceding year. This was the highest positive annual rate of change since January 2013 (+1.5%). In November 2016 the annual rate of change all over had been +0.1%.

Compared with the preceding month November 2016 the overall index rose by 0.4% in December 2016 (0.3% in November and 0.7% in October).