Last time I talked about Retail Sales, the main idea was that worse-than-expected Retail Sales releases are bad because they imply less consumption spending. This would be bad both for the stock market, given that less spending means less profits, and the currency market given that it would suggest that the economy is growing more slowly than expected. The latest US Retail Sales release showed that the numbers for September were much worse than anticipated (see below). How did the market react?
To begin with, the stock market (Chart above) dropped by 2 points in the half hour after the announcement. Similar to this, the USD (Chart below) dropped 17 pips upon the announcement. This expected negative reaction to the results highlights the importance of this indicator as regards to the overall state of the economy and also comes in a climate of overall uncertainty regarding the developments in US foreign policy.
Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.
Recommended Content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold reaches to all-time highs near $2,230, US PCE eyed
Gold price appreciates to all-time highs near $2,230 per troy ounce, attempting to continue its winning streak for the fifth successive session on Friday. However, trading volumes are light as market participants are likely observing Good Friday.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.