Boris Schlossberg
BK Asset Management
Market Drivers April 16, 2018
Dollar down against the majors
FX waits for US Retail Sales
Nikkei 0.26% Dax 0.10%
Oil $66/bbl
Gold $1345/oz.
Bitcoin $8130
Europe and Asia:
EUR GE WPI 0.0% vs. 0.4%
North America:
USD Retail Sales 8:30
USD Empire Manufcaturing 8:30
USD NAHB Index 10:00
It was a slow start of week’s trade in the FX market with majors making only minor moves in absence of any significant newsflow. The bombing of Syrian targets proved to be a non-event as traders to it to be a one off affair with US unlikely to commit more resources to the region for the time being.
Instead, FX traders went back to looking at economic data with dollar notably weaker ahead of the US Retail Sales report due at 12:30 GMT. Friday’s U of M Consumer sentiment survey preliminary reading plunged from multi-year highs of 101 back to 97 suggesting that the tax cuts are having zero positive impact on spending or sentiment.
The US consumer remains the lynching of the US growth/Fed tightening thesis and if consumption suddenly stalls the market will have to rethink its hawkish assumptions about Fed policy. Core Retail Sales have missed their forecast for the past two months with overall headline data showing month over month contraction since the start of the year. That’s hardly a sign of healthy consumer buoyed by low unemployment rates and lower tax burdens and could signal a more serious macro demand problem ahead.
Today’s data is shaping up to be a key data point for the market. A third straight monthly miss could quickly sour sentiment and send the dollar lower still. For now, USDJPY is holding above the 107.00 level while EURUSD remains below 1.2400, but both pairs could move in the aftermath of the release, with cable, which is already showing signs of strength in early London dealing exploding to the 1.4400 post Brexit high if US data disappoints.
Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD stays slightly above 1.0700 after mixed US data
EUR/USD lost its traction and turned negative on the day but managed to hold above 1.0700. Although the upbeat Employment Cost Index data boosted the USD earlier in the day, the weak consumer sentiment reading limits the currency's gains.
GBP/USD declines toward 1.2500 on renewed USD strength
GBP/USD turned south and dropped toward 1.2500 in the second half of the day. The US Dollar stays resilient against its rivals following the strong wage inflation data and doesn't allow the pair to gain traction.
Gold extends daily slide toward $2,300 as US yields edge higher
Gold stays under bearish pressure and declines toward $2,300 on Tuesday. The benchmark 10-year US Treasury bond yield stays in positive territory above 4.6% after US Employment Cost Index data, weighing on XAU/USD.
XRP hovers above $0.51 as Ripple motion to strike new expert materials receives SEC response
Ripple (XRP) trades broadly sideways on Tuesday after closing above $0.51 on Monday as the payment firm’s legal battle against the US Securities and Exchange Commission (SEC) persists.
Eurozone inflation stable as the outlook on prices gets increasingly muddied
Eurozone headline inflation remains stable at 2.4%. With higher energy prices and improving domestic demand, questions about the direction of inflation become louder.