- Strong print of the US retail sales contrast to weak Eurozone data strengthened market favor for the greenback.
- Good Friday to hit the market moves but Japan can offer intermediate push.
Forex market very well observed upbeat prints of the US retail sales and remained volatile on Thursday with the US Dollar (USD) being the largest gainer and the Euro (EUR) standing on the other end. Adding to the greenback strength could also be Robert Mueller’s report whereas UK retail sales could do little to please the British Pound (GBP). Wall Street portrayed the US optimism while risk-aversion was also present ahead of the long weekend starting with the Good Friday break.
The US monthly retail sales for March grew strongest in seven months and even surpassed the upbeat forecasts as it registered a 1.6% expansion over +0.9% market consensus and -0.2% prior. Details suggest that retail sales control group rose 1.0% versus +0.4% expectations and revised -0.3% previous whereas retail sales ex-autos, also known as Core retail sales, increased 1.2% compared to +0.7% forecast and -0.2% (revised) earlier readout.
In addition to the US retail sales, the publication of the full report turning down the probe that the Trump administration conspired with Russia in the 2016 Presidential election also played its role in fuelling the USD strength.
Alternatively, sluggish prints of the Eurozone and German purchasing manager index (PMIs) were weighing heavily on the EUR whereas JPY and Gold managed to confront the USD strength as global investors preferred risk-off ahead of long weekend. Adding to the risk-aversion could be the KCNA news report that North Korea tested new tactical weapons.
The Australian Dollar (AUD) couldn’t hold the gains from upbeat employment data whereas the New Zealand Dollar (NZD) followed the suit without much to read.
Wall Street also took advantage of the US data and ended in the green, The Dow Jones Industrial Average (DJIA) marking nearly 0.4% gains whereas S&P500 being 0.16% up with a small uptick in Nasdaq. Adding to the optimism were positive earnings report from Caterpillar and American Express.
The US 10-year treasury yields dropped three basis points to 2.56% from 2.59% portraying market risk aversion ahead of Easter holidays.
Looking forward, most of the global markets are closed due to the Good Friday but Japan will buck the trend and remain open. Traders may follow Japan’s national consumer price index (CPI) details for March. The national CPI is likely to increase to 0.5% from 0.5% on YoY whereas national CPI ex-fresh food, better known as core CPI, may remain unchanged at 0.7% on a yearly basis.