Retail Sales in Focus

Dollar started the day extending its Tuesday’s rally, based on Fed’s Powell words, but its rally came to an end ahead of the US opening, when the country released June Housing Starts and Building Permits, both posting large and unexpected declines. Mid-US afternoon, Trump hit the wires saying that he may do separated deals with Mexico and Canada, reviving partially trade war concerns.

Japan’s exports to the United States fell for the first time in 17 months and Japanese business sentiment soured amid worries about U.S. President Donald Trump’s protectionist trade policies. The batch of data highlighted concerns among Japanese policymakers who worry Trump may resort to tariffs or other protectionist measures to fix trade imbalances with Japan under his “America first” policy.

The EU released June inflation earlier on Wednesday, with core readings disappointing, flat for the month and up 0.9% YoY, adding to early EUR weakness. Amid no major macroeconomic releases in the Euro-zone today, investors would look forward to the US initial jobless claims followed by the Philadelphia Fed manufacturing survey for July and the leading index for June, slated to release later in the day.

The Sterling continued the week’s bearish action yesterday, declining from the day’s high of 1.3116, and extending the slide from the weekly high of 1.3292 to run into support from 1.3008. Inflation expectations for the UK were broadly missed on Wednesday, while Thursday will be bringing Retail Sales numbers to the Sterling trading market at 08:30 GMT, and bears can be expected to remain in control.

Oil prices were mixed on Thursday as the market struggled to digest signs of strong gasoline demand in the United States, the world’s biggest consumer of the fuel, with a statement from oil producers that they are putting cruder on the market. However, the EIA also reported U.S. oil production reached a record 11 million barrels per day (bpd). The United States has added nearly 1 million bpd in production since November, thanks to rapid increases in shale drilling. Also, a meeting of members of OPEC and non-OPEC producers monitoring their supply pact reported on Wednesday that compliance with the agreement has declined, meaning more oil is available to the market.

Gold having fall to new one-year low at $1221 on Wednesday by a boosted dollar, is currently trading at $1,223.40 per troy ounce and does not look as if it may pause near current levels. While the bears look string, there could be chances of a fall towards 1200 in the medium term before the price could see a corrective rise. Near to medium term looks bearish.