Strong US Retail Sales Boost Dollar; Asia Watches China Data

US retail sales beat forecasts, the dollar index rose, and Asia awaits China data: Fed speeches and industrial production key.

US Retail Sales and Empire State Manufacturing Index

In a positive turn of events, US retail sales saw robust growth in March, surpassing expectations. Both headline and core sales exceeded their respective forecasts, with headline sales rising by 0.7% month-on-month (MoM) compared to the forecasted 0.4%. In comparison, the core jumped by 1.1% MoM, outstripping the anticipated 0.5%. Noteworthy sales were led by segments such as non-store retailers, gasoline stations, miscellaneous store retailers, and building materials and garden equipment, with eight out of 13 categories witnessing significant increases, showcasing strong consumer spending trends.

However, the Empire State Manufacturing Index painted a different picture, declining more sharply than anticipated. The business conditions index registered a reading of -14.3, contrasting with the forecasted -5.2. New orders and shipments declined significantly, while unfilled orders continued to shrink, indicating weakening labor market conditions and subdued optimism.

Strong US Retail Sales Boost Dollar; Asia Watches China Data

Dollar Index (DXY) and Asia Session Outlook

Following the release of the robust retail sales figures, the Dollar Index (DXY) experienced a surge. It initially traded below the 106 level before rising strongly, hitting a high of 106.25 overnight. This upward momentum is likely to have implications for the Asia session.

In the upcoming Asia session, China will release a series of economic data points, including GDP, industrial production, and retail sales figures. These releases will offer valuable insights into the progress of economic growth in the world’s second-largest economy and could influence the direction of crude oil prices during the session.

Key Events and Market Biases for the Next 24 Hours

• Industrial Production: Industrial production figures are anticipated, with improved readings expected following mixed performances over the past six months. Higher-than-expected growth could serve as a potential bullish catalyst for the dollar.
• FOMC Member Barkin and Fed Chair Powell Speeches: Federal Reserve officials Thomas Barkin and Jerome Powell are scheduled to give speeches on economic outlooks. Following last week’s hotter-than-anticipated CPI and PPI data, their remarks will be closely monitored for insights into future monetary policy decisions.

Market Biases

• Dollar Index (DXY): Expect a medium bullish bias.
• Gold (XAU): Weak Bearish bias anticipated.
• Australian Dollar (AUD): Medium Bearish bias predicted.
• Kiwi Dollar (NZD): Medium Bearish bias expected.
• Japanese Yen (JPY): Medium Bullish bias anticipated.
• Euro (EUR): Medium Bearish bias predicted.
• Swiss Franc (CHF): Expect a weak bullish bias.
• Pound (GBP): Medium Bearish bias predicted.
• Canadian Dollar (CAD): Medium Bullish bias expected.
• Oil: Weak bullish bias is anticipated, with geopolitical tensions in the Middle East influencing prices.

The US retail sales surpassing expectations have bolstered the Dollar Index, setting the stage for potential market movements in the Asia session, especially with China’s economic data releases. Additionally, key speeches from Federal Reserve officials and the release of industrial production figures will further shape market sentiments in the next 24 hours.

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