US Open Note – US retail sales disappoint with minor impact on greenback

US retail sales dive below expectations

The highlight of the day is the US retail sales, which were flat month-on-month in April, worse than the 1% increase that was expected versus an upwardly revised 10.7% surge in March.

The US dollar index is retreating for the second consecutive day with weak momentum and unable to surpass the 91.00 mark. Dollar/yen is trading soft but above the 109.00 psychological level. The dollar could gain on a rise in US yields, while the slow recovery in the employment market may turn consumption lower.

However, there were some encouraging signs to the infrastructure bill. Republican senators and President Joe Biden had a meeting at the White House to discuss some disagreements.

US stock index futures are signaling a positive open today, on the heels of Thursday’s advance.

ECB released meeting minutes with no impact on euro

The European Central Bank released the minutes from its April meeting today. There were no surprises from the minutes, with euro/dollar remaining stable around the 1.2120 level and European indices keeping their gains as well. The bond purchase program under PEPP will remain within 1.85 trillion euros until March 2022 and in any case until the Governing Council judges the pandemic has come to an end.

Both the Fed and the ECB believe that any spikes in inflation measures will be transitory and could be an outcome of base effects from last year’s low prices, hinting that any monetary tightening this year would be premature.

Prime Minister Boris Johnson and Chief medical officer Whitty will have a press conference later in the day as the Prime Minister has expressed some concerns over virus variants. Pound/dollar is ticking higher, meeting the 1.4100 barrier.

Elsewhere, the yellow precious metal is heading upwards (0.5%) around $1,837/per ounce and oil prices are gaining some ground (1.2%) after the strong sell-off yesterday. The commodity currencies are returning to higher ground versus the greenback.

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.