Market Drivers – US Session, Nov. 15

Retail sales slipped in October, falling just a tenth of a percent from its upwardly revised level for the prior month. The PPI data supports the Fed’s tightening cycle, but the US Dollar Index recovered from monthly lows and the 10-year yield increased from 4.42% to 4.52%.

Wall Street stocks were on track for another positive day as investors reacted positively to the US data. China’s activity data improved in October, contributing to market optimism.

EUR/USD retraced from near 1.0900 to 1.0830, while GBP/USD retreated from the 100-day Simple Moving Average (SMA) at 1.2505 to 1.2400. The rebound in US yields boosted the USD/JPY pair, which climbed over a hundred pips to 151.30. Japan will release Machinery Order and trade data on Thursday.

AUD/USD ended flat on Wednesday around 0.6505 after reaching monthly highs at 0.6542. Australia will release the October employment report, with an expected gain of 20,000 jobs.

The Melbourne Institute Consumer Inflation Expectation report is also due. Gold pulled back due to the Dollar’s recovery and higher yields, closing around $1,960, while silver rose sharply again, closing at $23.45.

The Asian session is dominated by the Australian employment report, followed by China’s release of the House Price Index. The US Dollar rose due to a rebound in US Treasury yields, but appears vulnerable in the short term due to cooling inflation in the US.

The Producer Price Index (PPI) declined by 0.5% in October, aligning with the Consumer Price Index (CPI) data, indicating softer inflation. Retail Sales declined by 0.1% in October, against expectations of a steeper slide.

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