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March 2016

US retail sales to dominate the afternoon

Published: Tuesday 15 March 2016

  • US retail sales to dominate the afternoon
  • RBA is calm – AUD follows suit

Aside from a very positive Eurozone industrial production report, Monday was as serene as a swan on an infinity pool. The 2.8% annual figure to January was a solid bounce back from December's 0.1% contraction and was significantly higher than analysts' forecasts. The Euro strengthened a little on the day. 
Monday's serenity gave way to Tuesday's mayhem as the data diaries ramp up and volatility will follow suit. It started with the release of the Reserve Bank of Australia's meeting minutes. There were no big surprises there but the calmness of the RBA in their 'on hold' stance is the theme that many have commented on this morning. The Aussie Dollar was largely unmoved; it is struggling to make any gains below A$1.90 to the Pound. Worth knowing if you are an AUD seller.
The morning will also bring a raft of inflation data from a number of Eurozone countries. Inflation isn't a problem anywhere at the moment, so the data is likely to be ignored but things will get a little more lively when US retail sales data is announced later in the day.
The US data is expected to show a contraction in shopping mall and main street activity. A decline of between 0.1 and 0.4% is expected and that would be a worry for the Federal Reserve as it prepares to meet on Wednesday. The US Dollar is trading in narrow ranges against both the Pound and the Euro but weakness is expected against both if this data is as bad as forecasted. Against the Pound, the USD is trading between 1.40 and 1.45 but in the short term, the 1.42 and 1.44 mark the likely range.
Have a great Tuesday and it is probably worth noting that we should beware the ides of March. On this day 2,060 years ago, Julius Caesar was stabbed to death by several Roman senators including his 'friend' Brutus. In 1744, King Louis XV of France declared war on Britain and in 1877 the 1st Cricket Test match between Australia and England started at the MCG. It's all killing death war and battles. Let's be careful out there. 

Seen online

  • I think it’s pretty cool how the Chinese made a language entirely out of tattoos.
  • There is nothing more awkward than the moment you go for the hug but a handshake is offered in return.
  • Been reading up on the thesaurus lately because a mind is a terrible thing to garbage.
  • We get it poets: Things are like other things.
  • I am so sick of having to go to two separate huts to buy pizza and sunglasses.
Market BST Data/Event Previous Expected
EUR 10:00 E19: Employment rate, % q/q (y/y) 0.3 0.2
USD 12:30 US: Retail sales, % m/m -0.2 0.1
USD 12:30 US: Core retail sales, % m/m 0.2 -0.3
USD 12:30 US: PPI, % m/m (y/y) 0.1 -0.3
USD 12:30 US: Core PPI, % m/m (y/y) 0.4 0.1
NZD 21:45 New Zealand: Current account balance, bn -4.7 -3.0

FX Research by David Johnson

Daily Currency Analysis with Charlie Horsley

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