Post Fundamentals Analysis: Thursday, April 15, 2024

Post Fundamental Analysis - Quantum Strikes
Post Fundamental Analysis - Quantum Strikes

In today’s trading session, several key U.S. economic indicators were released, significantly influencing market sentiment and potentially setting the course for upcoming trading sessions. Below, we’ll dissect these numbers and explore their implications for the markets.

USD Retail Sales YoY (March)

  • Expected: 2.5%
  • Actual: 4%

Retail sales surged unexpectedly, posting a robust year-on-year growth of 4%, surpassing expectations of 2.5%. This spike suggests a strong consumer confidence and spending ability, which could signal broader economic strength and potential bullish momentum for the USD.

USD Retail Sales Ex Gas/Autos MoM (March)

  • Expected: 0.3%
  • Actual: 1%

This measure strips out volatile components like gas and auto sales, providing a clearer view of underlying consumer spending trends. The data indicated a significant increase, showcasing a more robust consumer base than anticipated. Such a positive adjustment from the expected 0.3% to 1% points to an underlying strength in the economy that might not have been fully priced into the market.

USD Retail Sales MoM (March)

  • Expected: 0.3%
  • Actual: 0.7%

Month-over-month retail sales also outperformed expectations, posting a 0.7% increase against a forecast of just 0.3%. This uptick supports the view of an invigorated consumer landscape, likely bolstering the USD against its major counterparts.

USD NY Empire State Manufacturing Index (April)

  • Expected: -9
  • Actual: -14.3

The NY Empire State Manufacturing Index, however, painted a less rosy picture. The index came in at -14.3, worse than the expected -9, suggesting contraction in the manufacturing sector. This could be a concern as it indicates sectoral weakness amidst broader economic strengths, potentially dampening some of the positive sentiment from the retail sales figures.

USD Retail Sales Ex Autos MoM (March)

  • Expected: 0.4%
  • Actual: 1.1%

Excluding auto sales, retail figures continued to impress, recording a 1.1% increase which far exceeded the expected 0.4%. This data underscores the ongoing resilience of the consumer sector, excluding the often unpredictable auto industry.

Market Impact and Trading Outlook

The overwhelmingly positive retail sales data suggest that consumer confidence and spending remain robust, which could be bullish for the USD in the near term. Traders might consider this an opportunity to look for strengths in USD-paired currencies, anticipating potential upward movements based on these fundamentals.

However, the weakness shown in the manufacturing sector could temper some of this optimism, indicating that not all sectors are experiencing the same levels of growth. This could introduce some volatility and caution in trading strategies, especially for those heavily reliant on industrial production data.

Overall, the strength in consumer spending may well offset concerns from the manufacturing sector, painting a generally positive picture for the USD. Traders should monitor how these figures influence Fed policy expectations and adjust their strategies accordingly to accommodate the dynamic economic landscape.

Trading our dreams into reality,
Mihai Paul Olteanu