Monday, March 11, 2019

Investors Will Look Towards The Retail Sales Data For Clarity As The NFPs Printed Mixed

Tags
  • Dollar
  • Gold
  • Yen
  • Euro
  • Pound
  • Stocks

MORNING BRIEFING
Friday's Non-Farm Payrolls report confused investors even more as the number of jobs added missed expectations by a a wide margin but wage growth still remains impressive. The Dollar saw a mild correction on the back of the labor market data and market participants will look towards today's Retail Sales data from the US for clues. The Euro and the Pound suffer on the back of central bank dovishness and loss of momentum in the Brexit process. Equities ended the week below water as growth concerns remain on the forefront.

The Dollar remains mixed against its major peers as Jerome Powell's “patient” approach continues to dominate investors' sentiment. Friday's NFP report did little to provide a direction as the figures printed in a confusing manner, with the number of jobs added disappointing but strong wage growth offset the bearish reaction. Dollar/Yen fell on Friday as equities’ rout persisted throughout the trading session. Market sentiment shows mounting concerns regarding the global growth while Chinese trade figures came much softer than anticipated.

The Euro picked up some gains during Friday’s session, after the US employment data showed only 30K jobs being created in February, in contrast the Unemployment rate fell to 3.8% vs the anticipated 3.9%. At the same time, wages increased more than expectations. However, the dovish bias persists following the TLTRO package announcement from the ECB last Thursday. Today, German Industrial Production and Trade Balance figures will be released, but traders will focus on the US Retail Sales which will be released later in the day.

Sterling drops to its lowest level since Feb. 19 against the Dollar ahead of several Brexit votes this week with investors still unsure over how it will all play out. Prices bounced higher on Friday after comments from EU's Chief Negotiator Barnier, saying that the EU is willing to give the UK the chance of a unilateral exit, which was later rolled back to take the Pound lower. This week, investors will closely monitor the UK parliamentary voting starting tomorrow in order to determine the short-term trade direction.

Gold scored gains on Friday on the back of the lackluster Dollar performance after the NFPs printed mixed. Prices have climbed towards the $1,300 level and are now consolidating looking for a new catalyst. Today's US Retail Sales figures should provide further clues on the domestic US economy and the yellow metal will take its cue from this report: support lies at $1,290 while the target to the upside is found at $1,304. Oil is pushing higher this morning even though there are concerns from Libya starting to pump more output again; given the mix of drivers in place a consolidation between $55 and $58 seems the way forward.

MARKET EVENTS TO WATCH

  • US Retail Sales- 4.30pm

All times are GMT +4.