Morning Note: US Retail Dip, Moderna Struggles & Japan’s Inflation Surge

U.S Retail Sales Expected to Decline

As of December 2024, U.S. retail sales increased by 0.4% month-over-month, following an upwardly revised 0.8% gain in November. This growth, while slightly below the forecasted 0.6% increase, indicates robust consumer spending during the holiday season.

Retail sales in January 2025 are expected to fall by 0.2%, representing the first decline since August. This decrease is attributed to consumers' tendency to pay off their credit card balances during the holiday season and extreme weather impairing early spending in the New Year.

(U.S Dollar Index Daily Chart, Source: Trading View)

From a technical analysis perspective, the overall trend of the U.S. dollar remains bullish, as indicated by higher highs and higher lows. However, the price has broken below the swap zone with significant bearish momentum and is currently retesting the previous low. If the price fails to find support at this level, bearish forces could take control, potentially driving the price lower.

Moderna Faces Earnings Slump and Investor Lawsuit

Moderna will announce its earnings, expecting a quarterly loss of $2.73 a share, reflecting a year-on-year drop of 581.8%. The revenue is projected to reach $956.11 million, marking a 66% drop from the same quarter last year. Meanwhile, shareholders of Moderna instituted a lawsuit against the company, claiming it misled investors concerning the effectiveness of its vaccine and overstated its potential.

(Moderna Shares Daily Price Chart, Source: Trading View)

From a technical analysis perspective, Moderna's share price remains in a bearish trend, characterised by lower highs and lower lows. Recently, bearish momentum has continued, driving the price lower and forming a new lower low.

Japan's Wholesale Inflation Hits 7-Month High

Japan's wholesale inflation rose to 4.2% in January, reaching its highest level in seven months and the fifth straight consecutive month of acceleration. This shows continuing price pressures and reinforces market bets for another rate hike later this year. Persisting food price rises come amid building public inflation expectations, underlining the central bank's concern over rising price risks.

(USD/JPY Daily Chart, Source: Trading View)

From a technical analysis perspective, the USD/JPY currency pair has been moving in a bullish trend since mid-September, as indicated by the higher highs and higher lows. Recently, it has formed another higher low, but the price action seems to struggle to go higher, as indicated by the rejection by a huge bearish force. Therefore, if the price breaks below the previous low point, the bearish force might regain control, driving the price downwards.