Article Highlights

  • U.S. Oct headline retail sales up 0.1% vs. 0.3% forecast
  • U.S. Oct core retail sales up 0.2% vs. 0.4% forecast
  • U.S. Sept headline and core retail sales figures downgraded
  • U.S. headline producer prices down 0.4% in Oct
  • U.S. Oct core producer prices down 0.3% vs. projected 0.1% uptick
  • U.S. UoM prelim consumer sentiment index up from 90.0 to 93.1
  • International Energy Agency projects weaker oil demand in 2016
  • New Zealand Q3 headline retail sales up 1.6% vs. 1.0% forecast, 0.1% previous
  • New Zealand Q3 core retail sales up 1.0% vs. 1.4% forecast, 0.0% previous
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Economic data from the U.S. came in mostly weaker than expected, leading the Greenback to retreat against most of its forex rivals, while falling commodity prices also came into play.

Major Events:

Downbeat U.S. data – I’m seeing red! U.S. retail sales figures missed expectations, with the headline figure for October posting a bleak 0.1% uptick versus the projected 0.3% gain and the core version of the report showing a 0.2% increase instead of the estimated 0.4% rise. PPI readings also fell short of expectations, as the headline figure indicated a 0.4% decline while the core figure posted a 0.3% drop, hinting at weaker inflationary pressures down the line.

The only positive report out of the U.S. was the preliminary consumer sentiment index from the University of Michigan which came in at 93.1, outpacing the consensus at 91.3 for November. However, the previous month’s reading suffered quite a downgrade from 92.1 to 90.0, indicating that consumer confidence wasn’t as strong as initially reported.

Oil price tumble – Black crack is stealing the show once more, threatening to start another wave lower by breaking below its recent lows. WTI crude oil fell below $41/barrel while Brent crude oil is trading under the $45/barrel level again.

As it turns out, the International Energy Agency predicted that oil demand will slow to 1.2 million barrels a day next year, posting a nasty price combo for rising stockpiles. Law of Supply and Demand y’all.

New Zealand quarterly retail sales – The consumer spending picture is looking mixed in New Zealand, with the headline figure printing a better-than-expected 1.6% gain and the core version of the report showing a weaker-than-expected 1.0% rise. As it turns out, surging auto sales were mostly responsible for propping up the headline numbers, followed by purchases of electronic goods.

Major Currency Movers:

USD – The U.S. dollar’s rallies proved unstoppable at the end of the forex trading week, as the currency shrugged off weak economic data.

USD/JPY fell upon hitting a high of 122.98 and closing at 122.56, EUR/USD found support around 1.0720 and capped of the week at 1.0771, and GBP/USD topped at 1.5240 before giving up some gains to close at 1.5225.

CAD – Oil price movements continued to push the positively-correlated Loonie around, with a fresh decline dragging the Canadian currency lower across the board.

USD/CAD surged from an intraday low of 1.3263 to a high of 1.3349, CAD/JPY climbed up to the 92.25 area then closed 3 pips below the 92.00 handle, EUR/CAD stayed above the 1.4300 major psychological mark then popped up to a high of 1.4355, and GBP/CAD tested the resistance at the 2.0300 handle.

Watch Out For:

  • Japanese preliminary GDP at 12:50 am GMT (-0.1% expected, -0.3% previous)
  • Australian new motor vehicle sales at 1:30 am GMT (5.5% previous)

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