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Sterling extended its stay in the top spot during the New York session while the Greenback barely reacted to stronger than expected U.S. retail sales.

Another round of airstrikes were reported in Syria, but financial markets seemed to shrug this off as well.

  • U.S. headline retail sales up 0.6% vs. 0.4% forecast in March
  • U.S. core retail sales up by another 0.2% as expected
  • Empire State manufacturing index fell from 22.5 to 15.8 vs. 19.8 consensus
  • U.K. CB leading index down by 0.4% from earlier flat reading
  • U.S. business inventories up by 0.6% as expected
  • U.S. NAHB housing market index down from 70 to 69 vs. forecast at 71
  • FOMC member Kashkari: Still seeing slack in wage growth, no signs of inflation acceleration
  • FOMC member Dudley: Potential trade war poses risks
  • Dudley: Three to four hikes sounds reasonable
  • Fed official Kaplan: Unemployment rate could fall to 3.7% this year
  • U.S. gov’t bans American companies from selling parts to China’s ZTE Corp
  • Trump accused China and Russia of currency manipulation
  • Chinese data dump coming up

Major Events/Reports:

Mostly upbeat U.S. data

Consumer spending turned slightly better than expected in March, with headline retail sales posting a larger 0.6% gain versus the estimated 0.4% uptick. Meanwhile, core retail sales advanced by another 0.2% as expected.

Underlying data revealed that the gains were spurred mostly by higher automobile sales during the period, allowing headline retail sales to post its first positive reading in four months. Sales in furniture and home stores were also in the green, reflecting increased demand for big-ticket items and possibly a rebound in consumer confidence.

Analysts remarked that this may just be the start of a pickup in consumer spending spurred by the tax cuts and that further gains could be in the cards.

On a less upbeat note, the Empire State manufacturing index slipped from 22.5 to 15.8 to indicate a weaker pace of industry expansion versus the estimated increase to 19.8. The NAHB housing market index dipped from 70 to 69 instead of advancing to the consensus at 71.

Risk appetite fighting back?

Even with the dip in risk-taking during the previous session, U.S. equities managed to pocket some gains, partly spurred by a good start to the earnings season.

  • Dow 30 index is up 212.90 points to 24,573.04 (+0.87%)
  • S&P 500 index is up 21.54 points to 2,677.84 (+0.81%)
  • Nasdaq is up 49.63 points to 7,156.29 (+0.70%)

U.S. bond yields were in positive territory for the most part of the session but gave up some of that ground before the close.

  • U.S. two-year bond yield is up 2.0 basis points to 2.37%
  • U.S. five-year bond yield is up 1.0 basis point to 2.683%
  • U.S. 10-year yield is up 0.3 basis points to 2.30%

Commodities gave up some of their winnings, with crude oil retreating on easing fears of more tension in Syria and gold returning some of its safe-haven gains.

Geopolitical risks still seem to be the main driving factor in the markets these days, as fresh jitters on Trump accusing China and Russia of currency manipulation are emerging.

The U.S. government also decided to ban American companies from supplying parts to Chinese firm ZTE Corporation, allowing trade war concerns to linger. To top it off, another round of airstrikes has been reported in Syria, but the U.S. has denied any involvement.

Major Market Mover(s):


The pound enjoyed the bullish momentum from its earlier run, which was seen to be spurred by BOE rate hike expectations and a bit more clarity in Brexit plans, even as its climbed slowed for the rest of the session.

GBP/USD rose from 1.4297 to a high of 1.4345, GBP/JPY continued its climb to a high of 153.57, EUR/GBP slid from .8643 to a low of .8628, and GBP/CAD is up to 1.8020.


The Kiwi was the weakest performer in the earlier trading session but it managed to recoup some of its losses and take advantage of the slight pickup in risk-on vibes.

NZD/USD bounced off .7336 to a high of .7363, NZD/JPY is up to a high of 78.94, EUR/NZD retreated to a low of 1.6787, and AUD/NZD fell back to 1.0550.

Watch Out For:

  • 1:30 am GMT: RBA monetary policy meeting minutes
  • 2:00 am GMT: Chinese GDP q/y (no change from earlier 6.8% figure expected)
  • 2:00 am GMT: Chinese fixed asset investment (dip from 7.9% to 7.7% eyed)
  • 2:00 am GMT: Chinese industrial production (fall from 7.2% to 6.4% expected)
  • 2:00 am GMT: Chinese retail sales (no change from earlier 9.7% reading eyed)