Archived IMT (2011.04.21)

USD accelerates sell-off, hits new record low on CHF. Euro rally slowed by 3-month low in German IFO. GBP supported by strong retail sales. Canada retail sales expected to recover from last month's disappointment. Philly Fed seen slowing from last month's multi-year high. Four Dow components report before the open.

EURUSD hits fresh highs for the year after a brief retreat following slightly weaker than expected German IFO. 110.4 was below consensus 110.6 and also marks the second consecutive decline from January's 111.2 peak. AUD/USD sliced through $1.07 to hit a new high of $1.0774. Aussie will shift focus to Australia's CPI next week that may potentially usher in renewed talk of policy tightening at the RBA. JPY and CHF - traditionally the safe-haven destinations at a time of panic and victims of risk appetite - are also benefiting from indiscriminate USD selling. USD/JPY fell below Y82 with an outside bearish candle on yesterday's rally, while USD/CHF knifed through its all-time low below the 0.8850 mark.

Cable is the single best outperformer in early London session, boosted by a much stronger than expected retail sales. Both headline and core figures rose 0.2%, as GBP/USD hit session highs above $1.6540 - its best level since late November of 2009. UK public sector net financing data also revealed much less borrowing than expected at GBP16.4B. There is little in terms of long-term resistance for cable before 1.6720.

In US/Canada economic data, Canadian retail sales at 8:30amET are expected to show a substantial core m/m increase to 0.5%, well above the prior month's disappointing flat figure. Canadian dollar maintained its solid pace of risk-on strength, with USD/CAD falling as low as 0.9467 - the lowest level since late 2007 - before rising to 0.9490 in early London session. In the upcoming US data, 8:30amET weekly jobless claims are expected to fall back below 400K after last week's disappointing 5-week high. In contrast, Philly Fed manufacturing survey is expected to fall to 37.1, the first m/m decline since December.

Among the most notable pre-market US earnings, Dow components GE, McDonalds, Verizon, and DuPont will report quarterly results.