Daily Market Update

Dollar Unable to Improve on Strong Retail Sales

April 16, 2018

The U.S. dollar is on the defensive this morning as it weakened against all but one of its G10 counterparts.

USD

A busy economic calendar may give the dollar some reprieve. U.S. retail sales slightly surprised to the upside. Overall sales advanced 0.6%, beating expectations of a 0.4% gain, according to the Commerce Department. Retail sales excluding auto sales met expectations of a 0.2% rise. A breakdown of the data shows that sales increased in eight out of thirteen major categories. Any gains from retail sales have been stifled by a second report that showed Empire State manufacturing disappointed with a 15.8 reading, missing expectations for an 18.4 jump.

The Federal Reserve’s Kaplan, Kashkari and Bostic are all scheduled to speak at different events today.

In addition, we will be keeping an eye on geopolitical developments including the aftermath of the missile strike on Syria and the expectations that the Trump administration will announce new sanctions on Russian officials today.

 

JPY

The Japanese yen held familiar ranges overnight. Japanese Prime Minister Shinzo Abe is headed to the United States to meet with President Trump regarding trade and North Korea. The pair are scheduled to meet at Mar-o-Lago starting tomorrow, a week after President Trump indicated willingness to re-enter the Trans-Pacific Partnership. The meeting comes as Abe is feeling pressure at home. Abe’s approval rating is now at a record low and many are calling for his resignation amid scandal allegations.

 

GBP

The British pound continues its march higher. The GBP/USD is on track for its 7th daily gain and its longest winning run since November. The sterling is now at its strongest level since January 25th, despite lackluster data. UK Rightmove house price data reflected a slowing in the housing sector. This print will be considered second tier, however, as much more important data is slated for later this week. Tomorrow will see the Labor market report, followed by CPI on Wednesday and Retail Sales on Thursday.

 

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