Intraday Market Thoughts

USD Returns from Greece Rally to Retail Sales at Home

by Ashraf Laidi
Jul 14, 2015 14:16

Just at a time when the US dollar was soaring on the rationale that a Greece deal will open the path for the Fed to tighten as early as September and on falling oil prices from a nuclear deal with Iran, the greenback half of its gains from Sunday evening's open on a 0.3% decline in US June retail sales, disappointing expectations of a 0.3% rise and a downward revision of the prior reading to 1.0% from 1.2%. It was the biggest monthly decline since February's supposedly weather-driven 0.5% decline. Earlier, the US NFIB Small Business Optimism Survey Index plunged to its lowest level since March 2014.   The latest US data disappointment sends the ball back to Fed Chair Yellen as she testifies to Congress tomorrow about the US economy and will likely begin to turn the September/December rate hike debate into a December/2016 debate.

DAX30 gives up at the 100-DMA, while the S&P500 pauses at 2100, just below its 55-DMA.

A new Premium trade will be issued later today.

Carney Lifts Sterling – from CPI to Earnings

GBP adds to its gains, outperforming all major currencies after Bank of England governor Carney said the time for a BoE rate hike is moving closer, lifting GBPUSD by 105 pips to 1.5603. The statement was made 90 minutes after the latest UK CPI data showed inflation slipping back to 0% in June following 0.1% in May. Carney's remarks maintained GBP strength as he went on to acknowledge the recovery in earnings growth and the reduction in household debt (seen as a barrier to higher rates).

Wednesday's release of UK June jobs & May earnings could be instrumental in further boosting GBP if earnings growth rises by the expected 3.0% from the prior 2.7%, in which case would be the highest increase since January 2009. Even a disappointing reading in jobs is likely to be shadowed by positive earnings growth figure, thus, favouring the currency. GBPUSD is showing a doji candle on the weekly, coinciding with the April trendline support and will have to close above 1.5580 to break above the June trendline resistance.

Click To Enlarge
USD Returns from Greece Rally to Retail Sales at Home - Usdx Daily Jul 14 (Chart 1)

Act Exp Prev GMT
Advance Retail Sales (JUN)
-0.3% 0.3% 1.0% Jul 14 12:30
Retail Sales (ex. Autos) (JUN)
-0.1% 0.5% 0.8% Jul 14 12:30
Retail Sales Ex Auto and Gas (JUN)
-0.2% 0.4% 0.5% Jul 14 12:30
Retail Sales Control Group (JUN)
-0.1% 0.3% 0.7% Jul 14 12:30
BRC Retail Sales Monitor - All (JUN) (y/y)
1.8% 0.0% Jul 13 23:01
Fed's George Speech
Jul 15 0:15
CPI (y/y)
0.0% 0.0% 0.1% Jul 14 8:30

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