Economic calendar: Another intense day for the British pound

Summary:

• Inflation report, Carney's testimony and May’s no-confidence motion among major GBP events today

• CBRT expected to stay on hold today

• DOE forecasted to report crude inventories dropping and gasoline stocks rising

Brexit saga continues with the UK House of Commons refusing to back deal proposed by PM May. Additionally, the UK Prime Minister will face a motion of no-confidence today (7:00 pm GMT). Apart from that, GBP may be more sensitive today due to inflation report release as well as testimony Mark Carney’s testimony on Financial Stability report (9:15 am GMT). Investors may also want to follow CBRT decision and DOE data release as both events have potential to spur volatility on TRY and oil markets.

9:30 am GMT - Inflation data pack for December from the United Kingdom. Theresa May suffered a tremendous defeat in the UK parliament yesterday. The outcome of the vote did little to ease uncertainty surrounding Brexit. Still, CPI data is one of the most important one for the currency therefore today’s reading has a scope to move pound a bit. Consumer inflation is seen decelerating to 2.1% YoY in December from 2.3% YoY in November. The core CPI gauge should remain unchanged at 1.8% YoY. Simultaneously the producers’ inflation data will be released and it is expected to show a drop to 2.9% YoY for the headline measure.

11:00 am GMT - CBRT interest rate decision. Turkish lira has found itself under pressure recently. Domestic data has been weak suggesting that the 2018 growth is likely to be slower than in 2017. Some institutions even hint that Turkey may fall into recession in 2019. Having said that, voices surfaced pointing to a possible rate cut. While it is unlikely that CBRT will decided to slash borrowing cost during today’s meeting, such an outcome should be put into consideration.

3:30 pm GMT - DOE report on oil inventories. After a brief pullback bulls have take control over the oil market once again. Yesterday’s API data showed a drop in the oil inventories but it was smaller than expected. Nevertheless, it did not stop prices from marching higher. Moods are being boosted by expectations that OPEC+ agreement will clear the supply glut present on the market. Today’s DOE data is expected to show a 1.5 mb drop in oil inventories. On the other hand, both gasoline and distillate stocks are seen rising.

Central banks speakers scheduled for today:

• 8:40 am GMT - ECB’s Nowotny

• 8:45 am GMT - Riksbank’s Skingsley

• 9:15 am GMT - BoE Governor Carney

Major US companies reporting earnings today:

• Bank of America Corp

• BlackRock Inc

• CSX Corp

• Goldman Sachs

Brent price found itself in an interesting spot. Commodity is still trading beneath the medium-term resistance zone but approached the 50-session moving average (green line). Note that it was two months ago when Brent last time closed above this technical hurdle. Reaction to the aforementioned moving average may be a key for near-term price moves. Source: xStation5