Good morning, traders.

The US & China finally reached phase-one of the trade deal on Wednesday. The details of the deal revealed that the signed agreement was more limited than comprehensive, which both sides had been seeking.

Some of the details mentioned in the 86-page agreement included better protection of intellectual property by China, relaxation of barriers to trade in food & agriculture by China, and a series of measures to open the financial services sector by both countries. With this, the market continues to trade with risk-on sentiment, which is causing a bearish bias for safe-haven assets like gold and bullish bias for the global stock markets.

The calendar today is fully loaded with high impact economic events where the major focus is likely to be on the German Final CPI m/m, ECB Monetary Policy Meeting Accounts. Most importantly, the US Retail Sales m/m are likely to be one of the main highlights of the day.

The market can get volatile during the US session in the wake of retail sales and Philly Fed manufacturing index, and these may drive price action in gold and US dollar related pairs today.

USD – Retail & Core Retail Sales m/m – 13:30 GMT

Retail sales are a primary gauge of consumer spending, which accounts for the majority of overall economic activity. Consumption consists of 70% of the American economy. In November, headline sales advanced by 0.2% and the volume of core sales by 0.1%.

This month, economists are expecting a 0.5% rise in retail sales and a 0.3% rise in core retail sales. A higher number of sales indicate higher inflation and a growing economy. Therefore, the actual data will be good for the greenback.

The figure is likely to perform better in December, which encompasses not only Christmas shopping but also some of the Black Friday sales, which came out late in the past season. Headlines sales carry expectations for an increase of 0.3%, while core sales are projected to rise by 0.5%.

USD – Philly Fed Manufacturing Index – 13:30 GMT
The Federal Reserve Bank of Philadelphia is due to the release of the Manufacturing Index. It’s a leading indicator of economic health – businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment. The figure is expected to surge by 5.0 vs. 0.3 in the previous month. The dollar may gain some support over this.
Good luck for today, and stay tuned for more updates!