The euro is in positive territory on Monday. In the North American session, EUR/USD is trading at 1.2050, up 0.43% on the day. Germany, the eurozone’s largest economy, impressed with a Retail Sales report for March that crushed the consensus. The gain of 7.7%, which followed a 1.2% gain, easily beat the forecast of 2.9%. It was the highest gain in 10 months and points to stronger consumer demand. It was a brutal Friday for the euro, which tumbled 0.82%. This was its sharpest one-day decline since February 26th. The US dollar registered broad gains on Friday, as investors showed a strong appetite for US bonds in month-end rebalancing flows. The US dollar also received support from strong US data on Friday. The Core PCE … [Read More...]

Oil extends gains on a strong demand outlook Oil prices are charging higher for a third consecutive session on fuel demand optimism. The oil market is looking through the Covid crisis in India, focusing instead on better-than-expected US crude inventories and the ramping up of refining activity. The oil markets see the light at the end of the Covid tunnel. US crude inventories rose by 90,000 barrels last week when expectations had been for a 659,000 barrel build. Meanwhile, distillate stockpiles, including diesel, fell by 3.3 million barrels, yet refining activity rose to 85.4% of capacity. Optimism surrounding the improving demand outlook is overshadowing the OPEC+ decision to stay on track to raise production levels. Goldman Sachs’ forecasts of oil at USD80 is just adding fuel to the … [Read More...]

Oil prices continue to climb Crude prices are rising on global reopening momentum, Moderna’s announcement to almost double vaccine capacity for the next year, and as Germany administered a record 1.1 million COVID vaccine doses.  Despite concerns over the Indian variant, parts of Europe are also heading towards reopening and could be poised to have a somewhat normal summer.  The crude demand outlook is getting a big boost from Europe and that should overcome some of the risks across India and many emerging markets. WTI crude’s rally was getting close to the ceiling put in place in March and quickly pared gains after a surge in Treasury yields triggered a slight bid for the dollar.  The outlook is still much higher for WTI crude, but a break of … [Read More...]

EUR/USD is almost unchanged in the Tuesday session. In the European session, EUR/USD is trading at 1.2078, down 0.06% on the day. Germany, the largest economy in the eurozone, releases consumer confidence data on Wednesday (6:00 GMT). GfK Consumer Climate has been mired in negative territory since March 2020, when the Covid-19 pandemic reached Germany and caused a severe downturn in the economy. The good news is that the declines have been easing since a sharp drop of 15.6 in January. The March reading improved to -6.2 and the April forecast stands at -4.1 points. The country’s business sector has been more positive about economic conditions. On Monday, the Ifo Business Climate index improved to 96.8 in April, little changed from 96.6 a month earlier. This reading missed the estimate of 97.8, … [Read More...]

Asian equity markets mixed after Biden tax proposals US equity markets fell overnight after President Biden signalled he wished to increase capital gains tax for high-income earners. Still, it is entirely reasonable that Biden will have to compromise on his proposal that calls for a tax hike of over 40%. The S&P 500 fell by 0.92%, while the Nasdaq and Dow Jones retreated by 0.94%. The reaction appeared more knee-jerk than structural, very much in keeping with the wax-on, wax-off price action that has defined the week’s price action. US index futures have risen by around 0.20% in aftermarket trading, limiting the fallout in Asia. The Nikkei 225 is down 0.80%, retail investors chasing their tails once again, and the start of Covid-19 … [Read More...]

The British pound has reversed directions on Friday and posted gains. In the European session, GDP/USD is trading at 1.3881, up 0.32% on the day. Retail sales, PMIs boost sterling The pound has shown considerable movement this week. The currency started the week in fine fashion, climbing 1.11%. This marked its best one-day performance since January. After pushing above the symbolic 1.40 line, the pound proceeded to retreat and fell back into 1.38 territory. On Friday, GBP/USD has gained ground, buoyed by strong economic data out of the UK. Retail sales were outstanding in March, with a gain of 5.4% (MoM). This reflects the easing of Covid-19 restrictions on consumer spending. At the same time, retail sales for the first quarter of the year were down by 5.8… [Read More...]