Forex news headlines for US trading, May 13, 2015:

  • US April advance retail sales +0.0% vs +0.2% expected
  • Retail sales control group 0.0% vs +0.5% expected
  • April 2015 US import prices -0.3% vs +0.3% exp m/m
  • US EIA crude oil inventories -2191K vs +25K expected
  • US sells 10-year notes at 2.237% vs 2.255% WI
  • April 2015 Canadian Teranet National Bank HPI 0.2% vs 0.1% exp m/m
  • Canada finance minister Oliver: Expect flat growth in Q1.
  • EU proposes that the UK gets an extra 2 years to bring deficit under 3%
  • Atlanta Fed GDP tracking estimate for Q2 lowered to 0.7% from 0.8%
  • Gold up $22 to $1215
  • WTI crude down 64-cents to $60.11
  • US 10-year yields up 4.5 bps to 2.29%
  • S&P 100 down 1 point to 2098
  • Australian dollar leads, US dollar lags

Another day, another soft US economic release. It was the fifth consecutive retail sales report that was below estimates as the cheap-gas consumer bounce never materialized. The reaction was decisive and the US dollar instantly fell about 70 pips against the yen, pound and euro but slightly less against the commodity bloc.

EUR/USD climbed more than 130 pips on the day and came within 10 pips of the May rebound high. It finished about 30 pips from the best levels of the day in a mild consolidation.

The pound remains an incredible force as it climbed for the seventh day to the highest since December. The Dec high at 1.5785 is the next level of resistance. Even economic downgrades from the BOE couldn't stop the pound.

USD/JPY fell to 119.02 at the lows. On the data it fell to 119.30 then rebounded back close to unchanged at 119.60 but sellers slowly returned despite a selloff in long-dated Treasuries (it was a massive steepener in bonds today). USD/JPY eventually took out the May low but closed slightly above it.

AUD/USD rose to the highest since January in another clear sign that the US dollar remains in a clear retracement phase. It cracked the April high of 0.8076 and then cruised (and closed) above 0.8100. Like in CAD, all the damage from rate cuts has been repaired.

USD/CAD also took out the May lows and fell to 1.1903 but a reversal in oil lent a bid to the pair that erased all the losses in US trading and the pair closed at 1.1955.

Overall, the bond-negative theme really re-established itself today. Yields fell on retail sales but almost instantly began to reverse and continued higher from there. Huge flows and real money are getting out of bonds and that's not the kind of trade that's a one-day (or one-week) trade.