Consumer Crunch Time

The US dollar got back in gear in New York trade Monday to halt three days of declines. The pound was the only G10 currency to lead the US dollar while the New Zealand dollar lagged again. Chinese retail sales and industrial production are due up next. Due Tuesday is the UK jobs report with earnings in focus.  (فيديو للمشتركين) هل حان وقت الشراء؟

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The euro stalled ahead of 1.2000 on Monday and then sank back to 1.1936 to finish narrowly lower on the day. The dollar stumbled early in the session but finished strongly as US 10-year yields came within a fraction of 3% once again.

Looking at the bigger picture, this week will be all about the consumer. It starts with Chinese data at 0200 GMT where retail sales are forecast to rise 10.0% y/y in April which is a slight slowdown from 10.1% in March. That report is out at the same time as industrial production, which is forecast up 6.4% y/y. The strengthening of the consumer and deceleration of industry is the backbone of what China hopes to achieve in the decade ahead.

In the US, better signs from the consumer are overdue. The highlight on the economic calendar this week is the April retail sales report. It's forecast to rise 0.3% m/m with the control group up 0.4%. Sky high consumer confidence along with tax cuts were expected to fuel a consumer boom this year but it hasn't yet materialized. If US spenders can crank it up, that bodes well for the dollar.

Canadian retail sales are also due up Friday. A turn for consumers more broadly would help to get the synchronized global growth story back on track and relieve pressure on emerging markets while potentially super-charging commodity prices.