Stocks & dollar lower ahead of inflation and retail sales data

Stocks & dollar lower ahead of inflation and retail sales data

Traders are starting the week cautiously with a full week of economic data, big bank Q1 earnings releases, and a round of big Treasury auctions. The dollar is slightly lower, the UK pound and Japanese yen showing the biggest gains. The United Kingdom is opening up pubs, restaurants and non-essential shops amid the lowest Covid cases since September. US Treasury 10Yr yields are up 3 bps to 1.67%, gold is lower by $8 to $1735 per oz, and oil up $1 to $60.40 per barrel.

Economic Data & Events

Monday: Eurozone Retails Sales (Feb)

Tuesday: CPI (Mar), Small Business Optimism Index (Mar), Eurozone ZEW Survey Expectations (Apr)

Wednesday: Export & Import Prices (Mar), Fed’s Beige Book

Thursday: NAHB/Wells Fargo Housing Market Index (Apr), Retail Sales (Mar)

Friday: Univ of Mich Consumer Sentiment Index (Apr), Eurozone CPI (Mar)

  • FX Rates
    April 12, 2021

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    The dollar is slightly lower, erasing earlier gains, ahead of a slew this week of economic data, bank earnings and Treasury funding. March’s CPI MoM is expected to be 0.5%, up from 0.4%, and Retails Sales MoM are expected to rise 5%, up from -2.7%. During the week, the big US banks – BoA, Citigroup, Goldman, JPMorgan, Wells – report fiscal Q1 2021 earnings. The US Treasury sells 3-, 10- and 30-year bonds.

    GBP

    The UK pound gained nearly 0.4% since Friday’s close, outperforming all other G-10 currencies. The UK government announced that outdoor pubs and restaurants, shops, gyms will reopen today. A quick rebound of the economy is expected as consumers have accumulated £150 billion in savings during the pandemic. The UK also releases key economic stats this week, including Industrial Production, Trade Balance, and monthly GDP.

    EUR

    The euro gained off earlier lows on the back of higher-than-expected Retail Sales -- a rise of 3% for February compared favorably with expectations of 1.7% and January’s decline of 5.9%. News in Germany is that a decision is forthcoming on the successor to Angela Merkel as chancellor.

     

    CAD

    The Canadian dollar edged lower ahead of today’s Bank of Canada business outlook report. Upbeat expectations could add support to the view that the BoC may be preparing to taper asset purchases, which some economists believe will  have a negative impact on Canada’s economy.

    ASIA/PACIFIC

    The Indian rupee fell by nearly 0.5% over the weekend, as Covid-19 infections reached new highs. However, companies in India are against more lockdowns and instead are working with the government to vaccinate their employees.

    The Japanese yen edged higher in a slight risk-off mood after regional stock markets declined. Or from enthusiasm following golfer Hideki Matsuyama winning The Masters, the first Japanese or Asian player to ever win a men’s major golf tourney.

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Scott Petruska, CFA
WRITTEN BY
Scott Petruska, CFA

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