Friday’s “risk-on” rally, triggered in part by those strong US employment figures, followed through on Monday as Asian shares and U.S. index futures rose. Although Europe was also higher at the open, some of the major indices such as the German DAX gave up their earlier gains as investors considered the impact of U.S. import tariffs on metals and how this may impact European companies and their profits.
The week ahead is a big one for the Aussie dollar and it starts off quickly with Retail Sales among other economic data points Sunday night at 8:30 p.m. Central. Taking the cake is the Reserve Bank of Australia’s monetary policy meeting at 11:30 p.m. Central Monday night. Though rates are expected to stay unchanged, the RBA’s tone has stood firmly that the next move in rates is likely higher than lower.
Yesterday’s FOMC Minutes brought exactly the lightbulb moment we not only expected but discussed at length since their meeting earlier this month. The only problem, how poor Eurozone growth and sentiment data has been. Even though the Federal Reserve has telegraphed that they are willing to let inflation run past their 2% target without forcing a faster pace of rate hikes, the dollar remains elevated.
Data from Europe this morning fell short of expectations, but the real catalyst was the Dollar’s mission. First, German GDP, ZEW Sentiment and Eurozone Industrial Production all missed. U.S. Retail Sales missed expectations as well, although last month’s read was revised better.