Today's major headlines

  • GBP pushes lower on Unemployment Data
  • Equities remain within their ranges
  • Dollar holds firm above 102

This morning, the UK released April's labour data, showing further signs of weakness. Unemployment ticked up 0.1% from 3.8 to 3.9%, with average earning holding firm at 5.8% as forecast.

The main concern would be the rise in people claiming benefits with a 50% higher than forecast print of 46.7K - up from the forecast of 31.2K. The UK managed to add 182K jobs through the same period, which is seen as a positive note.

The DXY held above 102 yesterday, but the ongoing debt ceiling debate has definitely made the markets nervous. This remains a short to medium term risk for US, bonds, and equities. Today's retail sales data will be another indication of how consumers are holding up with the continuous rise in rates.

The DXY held above 102 yesterday, but the ongoing debt ceiling debate has definitely made the markets nervous.

During the Asian session, we saw US 10Y sell off, which triggered some JPY buying and was also leading the strength matrix through the London session. This momentum has since died off, and will not doubt come into play after the retail sales report. 

Economic Data 

Whilst the GBP sold off on poor labour data, AUD also sold off on poor consumer confidence along with China Retail Sales. The RBA released their minutes from the RBA monetary Policy Meeting, but the minutes didn't quite live up to the Hawkish Tone of the meeting.

All eyes will be on the USD Retail Sales Report today. However, after a miss on Friday's Michigan Consumer Sentiment Survey, another miss here could see the US10Y yield drop, therefore seeing a bid in JPY.

Another economic event on today's agenda is the CPI data from Canada. 

If we see a miss on the Retail Sales out of the US, the market to watch would be short EURJPY. EUR longs are still overcrowded... However, a short term move above of 148.16 might be considered in case of a positive print. 

In case we see a miss on the Retail Sales out of the US, the market to watch would be short EURJPY.

A preferred way to trade any big upside surprises in Retail Sales would be via EURUSD shorts, as the EUR still looks vulnerable to corrections. As for the Canadian CPI data, it's important to remember that institutional investors are still holding big, short positions in the CAD.

Trading CAD lower on a lower CPI print might yield less volatility compared to a surprise beat, which could cause some of the stretched longs to trim some of their shorts. 

Trading CAD lower on a lower CPI print might yield less volatility compared to a surprise beat, which could cause some of the stretched longs to trim some of their shorts.

This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. INFINOX is not authorised to provide investment advice. No opinion given in the material constitutes a recommendation by INFINOX or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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