The Euro was able to create a new week’s higher high yesterday, showing good chances of further recovery for the next few days. The reason was Greece’s Prime Minister Tsipras press conference. Last Wednesday, the Greek parliament voted the second wave of reforms which brought them a step closer to the financial support plan. The vote was 230 of 300 in favor of reforming, the main areas targeted being bank failures and the justice system. Although these two victories represent important milestones, there is still a big amount of work to be done on aligning the economy. Because of these votes, the Euro surged by 200 pips over Monday’s lows without any other important news that impacted the trend.
The sterling fell a few pips during the night due to a failure in forecasting June’s retail sales numbers: expectations were of an increase of 0.3%, but the investors found themselves against a decrease of 0.2%. BoE’s Chairman Mark Carney announced a rate hike early next year, this keeping alive the bullish trend of the GBP, despite today’s miss. YoY retail sales growth pace lowered, setting the rate at 4.0% and defying the expected 4.9%. Regarding core retail sales, there was a fall of 0.2% MoM.
On the other hand, Canadian retail sales rose only 1.0% to $43 BCAD as of May. This was the third increase in a row, after the steep decline in December and January. In detail, the sales grew in 9 of the 11 economic subsectors, which represent 92% of the retail sales. Regardless of these results, USD managed to cope with the loonie and USD/CAD drove above 1.3000, despite the fall to 1.2945 during the day. This come-back is explained by the strong jobless claims data readings in the US.
Based on the jobless claims report mentioned above, the USD’s bullish trend might come back sooner rather than later. Also giving room for details, the analysis shows that despite the labor market’s volatility only 255.000 Americans signed on for unemployment benefits in the last week. This is the lowest number of claims recorded since 1973. Just to make it clearer, that was over four decades (40 years) ago. Contrary to the flashy numbers, the market still remains cautious about overreacting against them.
Shifting to commodities, the crude ride with the bearish flow with today’s increased uncertainty over the excessive supply whisper that is spreading among the investors. This pushed the WTI under the $49 threshold per ounce (same as in March). In addition, if we take a look at OPEC’s output we can see a significant growth in the last month-month and a half, with the group announcing they have no intentions of reducing it.
