Economic calendar: SEK and USD wait for inflation data

Summary:

• Inflation data from Sweden to be released in the morning

• US CPI data expected to show headline measure decelerate

• DOE data may spur volatility on the oil market

Investors will be served just a few noteworthy readings on Wednesday but some crucial ones. Price growth data from Sweden and the US may impact moods of central bankers from these countries therefore SEK and USD traders should watch it carefully. Apart from that, DOE report on oil inventories may finally show a big draw after yesterday’s API print pointed at 10.2 mb decline.

8:30 am GMT - Sweden, CPI inflation for November. The Swedish GDP disappointed greatly in Q3 with country’s economy contracting 0.2% QoQ. However, industrial production data for October as well as PMIs for November showed quite a solid picture of the Swedish economy hinting that the latest lacklustre growth figures could be just a temporary setback. Inflation holds firm in the vicinity of the target but is expected to decline slightly in November. Money markets expect Riksbank to rise interest rates in January and a strong inflation print could support them further.

1:30 pm GMT - US, CPI inflation for November. The latest remarks from the US central bankers were far from being hawkish. In turn markets assumed that the Federal Reserve wanted to cool investors’ heads and signal that rates are unlikely to be increased in 2019 at the pace similar to the one we saw in 2018. Today’s inflation reading may help Fed members regain confidence. Impact of declines on the oil market should be visible in November’s reading. Market consensus expects headline measure to decelerate from 2.5% YoY to 2.2% YoY while the core gauge should accelerate from 2.1% YoY to 2.2% YoY. Note that FOMC will make its interest rate decision next week therefore this data should be watched closely.

3:30 pm GMT - Weekly DOE report on oil inventories. After several weeks of inventory builds yesterday’s API reading finally showed a decent draw in the oil stockpiles. According to the American Petroleum Institute inventories decline by 10.2 mb during the past week. Nevertheless, oil price action remained shy a notch below the important price zone. Today’s DOE report may help bulls push higher in case it shows bigger than expected decline. Market consensus points to a 2.9 mb draw.

Central bank speakers scheduled for today:

• 1:30 pm GMT - ECB’s Hakkarainen

USDSEK has been trading in the consolidation range for the major part of the year. The pair continues downward move started on Tuesday today and in case the situation is to remain unchanged in the latter part of the day we cannot rule out possibility of USDSEK testing the 9.00 handle. Source: xStation5