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Crude oil continued to advance throughout the session, lifting the positively-correlated Loonie and bringing good vibes for Wall Street. The Aussie trailed behind its peers on weaker iron ore prices while European currencies remained under pressure.

  • Canadian headline retail sales up 0.8% vs. 0.3% forecast in April
  • Canadian core retail sales jumped 1.5% vs. 0.6% forecast
  • U.S. initial jobless claims at 241K as expected, 238K previous
  • U.S. house price index up 0.7% vs. 0.4% consensus
  • Euro zone consumer confidence index improved from -3 to -1

Major Events/Reports

Recovery in crude oil

After breaking one support level after another for the most part of this week, Black Crack finally staged a solid bounce and lifted the oil-related Loonie in the process.

However, the recovery is merely being chalked up to profit-taking as the week draws to a close rather than an improvement in fundamentals. Some say that this might just be a delayed reaction to the report from the Energy Information Administration that revealed a larger than expected draw in stockpiles.

In any case, the bounce was enough to improve the mood in the U.S. stock markets later in the day, allowing indices to pare losses.

  • WTI crude oil is up to $42.73 per barrel (+0.47%)
  • Brent crude oil is up to $45.20 per barrel (+0.85%)
  • Dow 3o index is down 12.74 points to 21,397.29 (-0.06%)
  • S&P 500 index is down to 2,431.00 (-0.10%)
  • Nasdaq is down to 5,784.88 (-0.19%)

Upbeat data from Canada

It looks like BOC policymakers are onto something as they’ve spoken about resilience in Canada’s consumer sector lately. Both headline and core retail sales readings beat expectations for the month of April, spurring positive growth expectations for the Great White North.

Headline consumer spending rose 0.8% versus the projected 0.3% uptick while the core version of the report printed a 1.5% increase versus the estimated 0.6% gain. Underlying data revealed that sales were up in nine out of the 11 subsectors, led by building material and garden equipment supplies.

Sales in clothing and accessories stores also chalked up a solid rebound for the month, but purchases in motor vehicles and parts retreated by 1.0% after jumping by 2.3% in the previous month.

BOE exiting member Forbes’ speech

The U.K. central bank is about to bid “Ta ta” to one of its most hawkish MPC members soon and Kristin Forbes ain’t leaving without a few more calls to tighten.

According to Forbes, there is some urgency to hike interest rates as the pound’s depreciation is putting more upside pressure on inflation. She did clarify, though, that this kind of price action is mostly driven by politics rather than U.K. fundamentals or BOE policy. She cautioned that it could be harder to raise rates at this point than in the past, adding that policy adjustments should be carried out gradually.

However, her upbeat remarks did very little to support the pound against its peers as market participants remained wary that the shaky government standing weakens the country’s Brexit stance. Besides, her exit leaves the central bank with one less hawk pushing for a hike in the next policy meeting.

Major Market Mover(s):

CAD

The Loonie held on to its intraday gains and went for more, getting an additional boost from better than expected retail sales figures.

EUR/CAD is down to 1.4757 (-0.90%), AUD/CAD tumbled from 1.0069 to 0.9976 (-0.91%), USD/CAD fell back to 1.3232 (-0.78%), and GBP/CAD slipped from 1.6896 to 1.6784 (-0.65%).

AUD

The Aussie lagged, not just behind its comdoll peers, but also against the rest of its major counterparts as falling iron ore weighed on the higher-yielding currency.

AUD/USD is down to .7539 (-0.17%), AUD/NZD slumped from 1.0456 to 1.0380 (-0.70%), AUD/JPY fell to a low of 83.73 (-0.20%), and AUD/CHF dropped to .7327 (-0.22%).

Watch Out For:

  • 1:30 am GMT: Japanese flash manufacturing PMI (53.4 expected, 53.1 previous)