Forexlive Americas FX news wrap: Retail sales plunge a record 16.4%
Forex news for NY trading on May 15, 2020
- NY Fed purchases next week will be $30B. Down from $35B this week
- Fed chair Powell to appear on news program "60 Minutes" on Sunday
- Baker Hughes oil rig counts 258 vs. 277 estimate and 292 last week
- Pres. Trump begins his press conference
- ECB Lagarde: Committed to doing everything needed within mandate
- European shares end the day mixed
- New York death toll falls below 150 for the 1st time in 7 weeks
- OPEC Secretary-General Barkindo: Premature to say OPEC+ may keep the 9.7M cuts
- Canada's Trudeau: Gov't to extend emergency wage subsidy program by another 3 mo.
- White House economic advisor Kudlow: May see some better economic numbers
- US business inventories for March -0.2% vs. -0.2% estimate
- JOLTS job openings 6191 vs. 5800 estimate
- University of Michigan consumer sentiment for May 73.7 vs. 68.0 estimate
- Fox Business. Health Sec. Azar hopes to have 1 or more vaccine by the EOY
- US industrial production for April fell -11.2% vs -12.0% estimate
- Canada International securities transactions for March C$-9.78B vs. C$20.61B
- US Empire manufacturing for May -48.5 vs. -60.0 estimate
- US April retail sales -16.4% vs -12.0% expected
- EU's Barnier: I'm not optimistic on Brexit talks
- The JPY is the strongest and the NZD is the weakest as NA traders enter for the day
In other markets:
- Spot gold is ending higher on the day and closing the week at the highest closing level since the week of November 23, 2012. The price this week moved above a topside trend line around $1720 and continued the run higher on Thursday and Friday. The high price today reached $1751.69. That took out the 2020 high from April 14 at $1747.36. The closing price will be right around that area. Next week traders will want to see the price extend and move away from that level if the buyers are to remain in control.
- WTI crude oil futures are trading at $29.55 for the June contract. That's up $1.99 or 7.22%. The July contract is trading at $29.58 up $1.70 or 6.13%. The high price for the June contract reached $29.92 today. That took it to the highest level since March 17, 2020. For the week, the price last Friday's closed at $24.74. With the current price at $29.55 that represents a gain of $4.81 or a whopping 19.4% advance. The price this week was encouraged by the reopening of US/global economies and hopes that a vaccine will be found sooner rather than later. Supply remains a problem but OPEC+ cuts and the natural cutting of US supply (Baker Hughes rig count down once again) is helping and demand should increase as workers go back to work.
Today US retail sales tumbled by a record -16.4% for the month of April. That was worse than the -12% estimate, and comes after a -8.3% decline in March. Ex auto's the numbers looked even worse with a -17.2% decline vs. -8.5% estimate. Ex auto and gas also fell sharply by -16.2% vs. -7.6%. Finally the control group tumbled by -15.3% vs. -5.0% estimate. The shock from the data did send the US dollar lower. Currency pairs like the USDJPY fell to session lows at 106.85, the USDCHF fell to a session low at 0.9697. The USDCAD dipped to its New York session low at 1.4072.
The EURUSD spiked higher to 1.0850 and in the process moved above its 100 and 200 hour MAs at 1.0823 area.
The GBPUSD, which was the weakest of the majors today on Brexit deal concerns, still had a brief corrective rally to 1.2192 before reversing and continued that trend back to the downside. The GBPUSD is closing near session lows at 1.21084.
The NZDUSD and the AUDUSD followed the path of the GBP as concerns about China persisted throughout the day, and that kept the AUD and the NZD on the weak side and closing near there lows for the day.
Although the retail sales were horrible, other data today was not as weak- at least relative to prior month and expectations.
Empire manufacturing index came in better at -48.5 vs. -60% expected (and -78.2 last month)
Industrial production fell by -11.2% but was still better than the -12% estimate. Capacity utilization also tumbled to 64.9% but was better than the 63.8% expectations.
The most promising data came from the University of Michigan sentiment index. The market was expecting a fall to 68.0 from 71.8 last month. Instead the index rose to 73.7. Current conditions rose to 83.0 from 62.8 estimate (and 74.3 last month). The expectations index was mixed with the index falling vs. the prior month to 67.7 from 70.1. However it was, still much higher than the 60.2 expectations.
The better data helped to bottom the dollar and started to move back to the upside. Stock indices also improved.
Those trends continued when later in the early New York afternoon session, Pres. Trump held a press conference in the Rose Garden and introduced "Operation Warp Speed" which is designed to speed up the vaccine efforts and also organize and strategize the distribution when a vaccine is found and developed. The president stated that he hoped a vaccine would be developed by the end of the year and deployed nationally/globally.In the US stock market today, the major indices were lower early on increased US/China tension as the US moved to block chip shipments to Huawei. The indices (premarket open) continued to move to session lows after the worse than expected retail sales.
However, the prices started to rebound helped by the aforementioned Michigan consumer sentiment, and vaccine comments from the White House.
By the end of the day, the NASDAQ index led the way with a gain of. 0.79% and closed at session highs. The S&P index and Dow industrial average also ended higher on the day. The S&P was also just off session highs.
Although higher today, the major indices still ended the day lower lower. The Dow Jones declined by -2.65% for the week, while the S&P fell by -2.26%, and the NASDAQ index declined by -1.17%.
European shares were mixed today with the German DAX index rising by 1.2%. The UK FTSE 100 rose up by 1%. Spain's Ibex bucked the trend and declined by -1.0%. The Italy's FTSE MIB closed near unchanged.
Below are the percentage high, low, close changes of the major indices for day.
In the US debt market today yields opened lower, but rebounded after the better Michigan data, and the White House's positive comments. The yield curve steepened with the 2 year near unchanged and the 30 year up 3.2 basis points.