Forex headlines April 14, 2014:
- March US retail sales control group 0.8% vs +0.5% expected
- Headline retail sales were +1.1% vs +0.9% exp
- Prior retail sales revised higher
- US Feb business inventories +0.4% vs +0.5% exp
- Economists raise Q1 GDP forecasts after retail sales
- Congressional Budget Office cuts 2014 US deficit forecast
- Slaviansk separatist leader appeals to Kremlin for help
- White House says concerned about provocative actions by Russia
- ECB’s Bonnici: Negative deposit rate could impact euro in right direction
- ECB’s Nowotny: Fed should clearly communicate intended path of policy
- ECB’s Noyer: The more euro appreciates the more need to act
- Former ECB member Stark says no deflation
- Gold up $7 to $1325
- WTI crude oil down 13-cents to $103.61
- US 10-year yields up 2 bps to 2.64%
- S&P 500 up 15 points to 1831
- AUD leads, EUR lags
For the third day it was a wild ride in the stock market but bonds and FX hardly shrugged.
The highlight was retail sales and the data was good. On the headlines, USD/JPY broke 102.00 up it only lasted a moment. It slipped back to 101.70 despite a solid day in stocks.
The focus was the euro after Draghi’s weekend jawboning. EUR/USD gapped lower at the open, falling 40 pips to 1.3840 and then fell again to a session low of 1.3809 as New York arrived. From there it was a mediocre chop up to 1.3830. A few other ECB members flexed their jawbones but nothing moved the needle.
Cable touched below 1.6700 on the retail sales report but the buyers were ready and it quickly bounced. It was a chop higher to 1.6740 and then settled back to 1.6725.
The commodity currencies were disconnected from stocks once again. This round of volatility in the stock market hasn’t spilled over to anything else. It’s a headscratcher if you’re trading on correlations. We’ll see what tomorrow brings.
