A giant beat for US Retail Sales, lifted the USD, Treasury Yields and world inventory markets, with a raft of “soft landing” situations swirling and even discuss of a “no landing”, a scenario the place inflation cools shortly, the economic system grows steadily and unemployment stays low with out having a knock-on impact for inflation. An actual disparity in views now rising. Goldman Sachs reduce the possibility of a US recession within the subsequent 12 months to 25%, from 35%; US 2yr/10yr yield curve at -87bp because the 10yr hits a 7-week excessive. Overnight: Japan reported it’s largest ever commerce deficit at $174 billion as imports surged because of excessive power prices with exports unable to compensate. AUD decrease after a hunch in jobs (-11.5k vs +20k) & unemployment up (3.7% from 3.5%).
- FX – USD Index examined into 104.00 for a 28-day excessive. Back to 103.65 now. EUR examined the weekly low at 1.0670 earlier than recovering 1.0700, JPY breached 134.00 (new 28-day excessive) & tardes at 133.86 now. Sterling declined from 1.2175 to as soon as once more bounce from under 1.2000 to commerce at 1.2050 now. Nicola Sturgeon the First Minister of Scotland introduced a shock resignation, that can doubtless strike a blow for Scottish independence and enhance the probabilities of the Labour Party at subsequent years common election.
- Stocks – The US markets rose into shut after a weak open. (+0.11% to +0.92%) Movers – #ABNB +13.35% & COIN +17.5%, OXY & PXD each shed over -5.2%. US500 0.28% (11.47) 4147, holding the key 4100. US500 FUTS 4161 now.
- Commodities – USOil – Futures dropped to $77.20, 5-day lows, yesterday after a really giant inventories construct of 16.3m barrels vs. 2.4m barrels final week. Prices have recovered to $79.20 right now. Gold – examined the assist stage at $1830 yesterday earlier than recovering to $1840.
- Cryptocurrencies – BTC – Surged over +10% yesterday from $22.0k lows, to breach the important thing $24k resistance space and check to 24.9k highs.
Today – US Building Permits/Housing Starts, Philly Fed, PPI, Weekly Claims. Speeches from Fed’s Bullard, Cook & Mester, ECB’s Lane, Panetta & de Guindos, BoE’s Pill. EARNINGS – Pernod Ricard (miss), Commerzbank, (+7.5%) Orange, Airbus, Standard Chartered (+2.11%), Nestle (in-line -0.49%) , Paramount & Dropbox.
Biggest FX Mover @ (07:30 GMT) USDJPY (-0.34%). Rallied to 134.35 yesterday however has dipped to 133.75 now. MA’s now flat, MACD histogram & sign line optimistic however declining, RSI 51.42, H1 ATR 0.196, Daily ATR 1.588.
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Stuart Cowell
Head Market Analyst
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