The S&P 500 opened higher today, but still recorded its worst weekly performance since February. A sell-off in commodity prices helped calm traders who have been worried about inflation risks. Foreign stocks showed strength, Asian markets advancing more than 1%. The dollar is broadly lower and US Treasury yields are lower by 2-3 bps. Oil is up slightly, but iron ore prices fell 6%, the most in three months. US Retail Sales for April released this morning were weaker than expected.
May 14, 2021
EUR/USD 1.2142 GBP/USD 1.4103 USD/CAD 1.2089 AUD/USD 0.7772 USD/JPY 109.32 USD/CNH 6.4360 USD/ILS 3.2752 USD/MXN 19.8033 USD/CHF 0.9017 USD/INR 73.2937 USD/BRL 5.2613 USD/SGD 1.3313 USD/DKK 6.1249 USD/SEK 8.3481 USD/NOK 8.2428
The dollar is broadly lower amid a renewed risk-on mood in the markets. The dollar downtrend which began in April remains intact. April Retail Sales MoM at 0.0% was much lower than 1.0% expected and 9.8% in March. April Industrial Production MoM at 0.7% was lover than 0.9% expected and 1.4% in March.GBP
The UK pound was up slightly on the back of the broadly weaker dollar. It’s five-week uptrend is intact, and trades within sight of a two-month high at 1.4182. The UK’s stock market has been showing relatively good gains, as it is less reliant on the tech sector, which has been particularly impacted by the higher inflation data. Traders look forward to a heavy slate of UK economic data next week.EUR
The euro is up 0.4% overnight amid the weaker US dollar. The EUR/USD remains near its highs of the week and only 1.3% from its YTD high at $1.2350. Traders look forward to a heavy slate of eurozone aggregate economic data next week.CAD
The Canadian dollar is up nearly 0.5% overnight amid higher gold and oil prices, and as concern over US inflation abates. Yesterday’s comments by BoC Governor Macklem did little to change the strengthening direction of the CAD, which has accelerated over the last month. Canada’s Manufacturing Sales for March of 3.5% met expectations.ASIA/PACIFIC
The Chinese yuan and Japanese yen moved little overnight. There were no economic data releases overnight, but next week there is a full docket for both countries.
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