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Weekly Market Outlook – 15/05/16

Weekly Market Outlook – 15/05/16

U.S. data ended the week with a surprise on Friday as Retail Sales figures came in better than expected. Also the Consumer Sentiment reading from the University of Michigan turned in a stronger outcome. While the broad Retail Sales figures were indeed better it must be pointed out that the expectation had been a negative -0.3% and the result was a gain of only 1.3%, meaning that while the figure was positive it was not tremendous. Highlighting the fact that the number did not cause a shakeup of sentiment, Wall Street turned in a poor performance on Friday and finished the week quite negatively.

The USD The USD The USD is the official currency of the United States of America. It is the largest reserve currency... More is the official currency of the United States of America. It is the largest reserve currency... More did gain on Friday picking up ground against both the EUR The EUR The EUR is the official currency of the European Union. Presently 19 out of the 28 collective  nati... More is the official currency of the European Union. Presently 19 out of the 28 collective  nati... More and GBP The GBP The GBP is the official currency of the United Kingdom. The GBP is a major currency and currently ra... More is the official currency of the United Kingdom. The GBP is a major currency and currently ra... More to close out the week. Short-term traders certainly had the opportunity take advantage of trends on Friday as the Greenback The USD is the official currency of the United States of America. It is the largest reserve currency... More fought back well and provided a good day of trading for USD buyers.

Early Saturday morning China turned in a bad Industrial Production number. This might have an impact on Asian markets as they open early on Monday, particularly after the sell off of stocks from the States. Asian stock markets have been feeling the pressure for a long-time and investors may use Friday’s outcome on Wall Street and China’s bad number from Saturday as a trigger for Asian Indices and perhaps send them lower.

The Empire State Manufacturing Index reading will come from the U.S. on Monday. On Tuesday inflation In economics the term inflation In economics the term inflation In economics the term inflation refers to price values that are rising on a regular basis in which t... More refers to price values that are rising on a regular basis in which t... More refers to price values that are rising on a regular basis in which t... More data will be printed from the U.K., from the States inflation figures will be seen also – besides Housing numbers that will start to be published too.  Wednesday will see the Claimant Count statistics from the U.K. and the U.S. will present Crude Oil Inventories and the FOMC Meeting Minutes. Thursday Retail Sales numbers will come from the U.K. and the Philly Fed The Federal Reserve The Federal Reserve is the Central Bank of the United States of America and sets the monetary policy When used by traders and investors monetary policy When used by traders and investors monetary policy When used by traders and investors monetary policy usually refers to Central Bank policy concerning ... More usually refers to Central Bank policy concerning ... More usually refers to Central Bank policy concerning ... More ... More is the Central Bank of the United States of America and sets the monetary policy... More Manufacturing and weekly Unemployment Claims will follow from the States.  G7 meetings get underway on Friday and will extend into the weekend.

The rise of the USD on Friday was interesting because it shows that the Greenback can be influenced by data that may be open to interpretation in a variety of different manners. While the Retail Sales numbers were better it did not help corporate retail shares on Wall Street because profits continue to show they are under pressure via proper accounting. Which may highlight that the American consumer may be shopping, but they may also be looking for products that are being heavily discounted.

The USD should be watched all week and traders will have to be nimble. The GBP certainly has some interest as a long-term buy because many investors doubt that U.K. voters will embrace the possibility of a real Brexit. The USD also has the shadow of the Fed The Federal Reserve is the Central Bank of the United States of America and sets the monetary policy... More hovering above it and while Retail Sales numbers were stronger, they will likely not be enough to cause the Fed to ratchet up rhetoric on a potential hike of interest rates. Also the weekly Employment Claim result from last Thursday was negative which followed the previous week’s results which were bad too.  The Fed should still be watched carefully though and the FOMC Meeting Minutes that will be seen on Wednesday could prove worthwhile to read.

Crude Oil is turning into must watch television for traders. The energy has been highly valued short-term and is seemingly holding onto its trend. However demand is still under question and supply appears to be good. Canada still is affected because of the chaos caused by wildfires in its largest oil producing region, but production globally is fine – in fact it is likely too strong.