US: Retail sales were softer than expected in April - Natixis

Sandeep Kanihama FXStreet Contributor

Thomas Julien, Research Analyst at Natixis, notes that the US retail sales rose less than expected in April, gaining 0.4% MoM.

Key Quotes

“Car sales recovered slightly with also a modest increase in gasoline sales, but the control group of retail sales (the portion the BEA is using to estimate GDP) surprised on the downside, increasing by only 0.2% MoM. However, past month data were revised upward. All in all, the trend in retail sales remains good and we maintain a positive outlook for consumption.”

“Retail sales rose by 0.4% MoM in April, below consensus expectations (+0.6% MoM) and ours (+0.7% MoM). As expected car sales recovered after 3 months of decline. Gasoline sales were up, but slightly less than expected given the rise in prices during the period.”

“The control group sales surprised on the downside, rising by a modest 0.2% after being revised upward in March to 0.7%. Everything else being equals, this report is positive for Q1 growth (with a potential for upward revision for consumption) and slightly less positive for Q2.”

“In short, report is slightly softer than expected but the trend in retail sales remains stable. Our view is that employment gains as well as accelerating wages will support households’ disposable income in the near term, which should translate into more consumption. However, we do not expect car sales to recover. On the contrary, we believe sales will keep decelerating as the massive catch up effect that supported sales in 2016 should start fading.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

AUD/USD hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold pares intraday losses; down a little below $4,100 as focus remains on US NFP

Gold recovers most of its early intraday losses, trading with a mild negative bias near $4,070-$4,075. The US Dollar extends Thursday's recovery from its lowest level since late September, exerting some downward pressure on the commodity. Furthermore, a hawkish US Federal Reserve contributes to the precious metal pullback from a two-week high, which it touched the previous day. Bearish traders, however, seem hesitant ahead of the release of US monthly employment details, which should provide a fresh impetus to the precious metal.

Canada Unemployment Rate set to hold at 6.5% as hiring recovers

Statistics Canada will release its October Labour Force Survey on Friday at 13:30 GMT, with markets anticipating a modest recovery in employment following September's sharp decline. The Unemployment Rate will also be closely watched, as the latest figures could influence the Canadian Dollar.

US Nonfarm Payrolls expected to pick up in October

The United States Bureau of Labor Statistics is set to release October Nonfarm Payrolls data on Friday at 13:30 GMT. The report is expected to show an increase of 65K jobs, up from 29K in the previous month.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.