Wall Street slides in early trade on weak retail sales data

Eren Sengezer FXStreet

Major equity indexes in the U.S. started the day sharply lower on Thursday as investors assessed the disappointing retail sales data. As of writing, the Do Jones Industrial Average was down 0.75% on the day while the S&P 500 and the Nasdaq Composite were down 0.65% and 0.4%, respectively.

The U.S. Census Bureau today reported that retail sales declined by 1.2% on a monthly basis in December to miss the analysts' expectation for a 0.2% growth by a wide margin. Retail sales excluding automobiles declined by 1.8% in the same period. Both consumer staples and consumer discretionary sectors reacted negatively to the data and were losing around 1% in the early trade.

Reflecting the risk-off mood, the CBOE Volatility Index, Wall Street's fear gauge, rose nearly 10%. With T-bonds finding demand amid flight-to-safety, their yields fell sharply in the early NA session and weighed on the trade-sensitive S&P 500 Financials Index, which was last down 1.5% on a daily basis. On the other hand, the S&P 500 Technology Index is the only major sector in the positive territory with a modest 0.15% gain.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.