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XTB TRADEBEAT

USD advances ahead of retail sales, European stocks mixed

Summary:

  • Stronger USD weighs on precious metals market

  • Mixed session for the European equities

  • Investors await retail sales data from the US

As the top tier European macro readings scheduled for today have been already published investors’ attention turns now to the US data. In Europe stocks are trading mixed while in the US S&P 500 futures point for a lower opening. On the currency front JPY is the biggest underperformer among majors along with AUD. NOK together with USD are the leaders in the G10 basket. Gold and silver trade significantly lower thanks to the stronger greenback. Both Brent and WTI advance ahead of the weekly API inventory report (9:30 pm BST).

Wage growth in the UK economy, the most eagerly scrutinized point of each employment report, grew in line with expectations during the three months ending in March continuing to take off a squeeze on consumer spending. At the same period, the unemployment rate stayed unchanged whereas employment growth increased considerably.

Digital currencies got a boost over the past hours and the yesterday’s speech of Federal Reserve James Bullard could have contributed to some extent. He spoke to CNBC during the Consensus conference (the event concerning cryptocurrencies) in New York, and underlined that instability in exchange rates is the biggest obstacle toward more widespread cryptocurrency acceptance.

Turkish president Recep Erdogan gave some interesting remarks concerning the economy in an interview with Bloomberg yesterday. However, they do not bode well for Turkey. Erdogan expressed that once he wins the upcoming elections and tightens his grip on power he will increase his influence on country’s monetary policy.

Moves across the currency space have been quite benign of late, and currently the Japanese yen along with the NZ dollar are the worst currencies within the G10 basket. On the other hand, the Australian dollar is trading just a little lower despite a torrent of dovish comments coming from the RBA minutes as well as Guy Debelle’s speech. The reason? Market participants may have already accustomed to that kind of words.

The latest inflation readings from the US disappointed yet the drop could be accounted to one-off factors. Today’s retail sales print will give investors’ a hint whether the demand is still growing in the world’s biggest economy or has it already reached a peak. A growing demand may spur additional inflationary pressure therefore an upside reading is eagerly expected. 

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