All eyes on US retail sales data later in the day

Author: Justin Low | Category: News

A bit of a quiet one in Europe once again

US
Major currencies aren't doing a whole lot, with the dollar holding a tad mixed as it sits lower against the yen (which is helped by lower yields) while commodity currencies are extending gains on the week amid the more buoyed risk sentiment.

US futures are pointing to modest gains with Nasdaq futures up 0.5% while S&P 500 futures and Dow futures are both up 0.4%. Elsewhere, 10-year Treasury yields remain slightly lower, down by nearly 2 bps close to 1.61% at the moment.

The key risk event in the market today is the US retail sales data release later at 1230 GMT. Some thoughts on that from earlier:

As mentioned earlier in the week, bond sellers have had plenty of good reasons to extend the rout this year over the past two weeks (non-farm payrolls, ISM services report, PPI data, CPI data). Yet, Treasury yields are settling in the lower-end of the latest range.

That continues to reaffirm sentiment that it will take more consistent and upbeat data points in the months ahead before the market will actually start responding again; considering the Fed isn't just going to move based on 1-2 months of skewed data.

The consensus for the retail sales data today are already relatively strong but the actual readings may likely be even stronger, according to analyst estimates.

That may spark a knee-jerk reaction in yields and the dollar but ultimately it seems like we may settle back around current levels again until there is enough of such evidence of the US economy running hot and inflation spiking to nudge the Fed.
And here are a couple of previews to chew through until then:


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