Rates as of 0500 GMT

Market Recap

Not much worth writing about in the FX market today! Very small movements except in AUD and NZD.

It seems that the blowout US data yesterday has improved the riskon sentiment. US retail sales were up 9.8 mom vs 5.8 forecast, jobless claims fell an enormous 168k vs 44 expected to a postpandemic low, and the Empire State and Philly Fed indices both beat expectations too. Industrial production didnt however, although it did still rise mom. Despite this, US Treasury yields fell 10 years 5.6 bps. Was it in continued reaction to the dovish comments from Fed Chair Powell and Vice Chair Clarida on Wednesday? Or the renewed demand from Japanese investors with the start of the new fiscal year, as I mentioned in yesterdays comment? Plus earnings were generally good and forecasts revised up. The combination took US stocks higher to a new record high on the SP 500 but not yet on the NASDAQ, although its close while the VIX index fell to a new postpandemic low.

The good mood continued in Asia, where most markets were up modestly, helped by strong Chinese growth 18.3 yoy vs 18.5 expected, although qoq growth was disappointing 0.6 qoq vs 1.4 expected.

The signs of strong global growth helped commodity prices as well as the commodity currencies. AUD and NZD were the winners. CAD was the exception, falling on weaker Canadian manufacturing sales 1.6 mom vs 1.0 expected. CAD is recovering this morning though, boosted by the rise in oil, apparently….