Solid US retail sales points to 2Q GDP rebound | ING Economics

Solid US retail sales points to 2Q GDP rebound | ING Economics

ING Economics ING Economics 18.05.2022 23:23
The US retail sales report for April is very solid and points to a willingness amongst households to run down accumulated savings to maintain lifestyles at a time when inflation is hurting real income growth. It fully backs the case for a sharp recovery in GDP growth in 2Q and a series of 50bp rate hikes from the Federal Reserve Restaurants and dining contributed positively to US April retail sales 29% Increase in US retail sales since January 2020   Households happy to spend US retail sales rose 0.9% month-on-month in April, not quite as strong as the 1% consensus expectation, but there were substantial upward revisions for March to 1.4% MoM growth from the 0.5% rate initially reported. Moreover, the "core" figures that better match up with broader consumer spending trends were much better than expected. The control group that excludes volatile food, gasoline, food service and building material rose 1% (consensus 0.7%) after a 1.1% increase in March (originally reported as -0.1%). The details show motor vehicle and parts sales rose 2.2%, which is quite disappointing given unit auto sales data posted a 7.2% MoM rise to 14.29mn in April and prices were significantly higher. Maybe we will see more upward revisions down the line or timing issues may mean they feed through into May’s figure. Gasoline station sales fell 2.7% due to slightly lower prices – remember the retail sales report is a nominal dollar value figure. Food & beverage stores, building materials and sporting goods all saw modest falls, but this was more than offset by a 4% increase in miscellaneous stores, a 2.1% increase in non-store retailers, a 1.1% increase at department stores and a 2% increase in eating and drinking place. US retail sales performance by component Source: Macrobond, ING Households are prepared to run down some savings This is an impressive outcome given consumer confidence has been hit hard by the fact wages are not keeping pace with the increases in the cost of living. Nonetheless, employment is rising and household wealth has increased substantially during the pandemic thanks to accumulated savings (in part down to huge fiscal support) and soaring asset prices. Today’s report suggests household appear content to run down some of those savings to maintain lifestyles. People movement has fully recovered after Omicron wave Source: Macrobond, ING 3%+GDP growth on the cards for 2Q 2022 This is also borne out by data showing big improvement in people movement around retail and recreation areas (see chart above on google mobility data), surging restaurant dining and a recovery in air passenger numbers following the Covid Omicron wave. This gives us more confidence in our 2Q GDP forecast of 3-3.5% annualized growth. In an environment of 3.6% unemployment and 8.3% inflation this supports the case for a series of 50bp rate hikes from the Federal Reserve. Read this article on THINK   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
UK inflation soars to 9% | Oanda

UK inflation soars to 9% | Oanda

Kenny Fisher Kenny Fisher 18.05.2022 23:15
Pound slides after CPI report The British pound has taken a tumble after April CPI jumped to 9.0% YoY, up sharply from 7.0% in March. GBP/USD has fallen 100 points today and is trading at 1.2390 in North American trade. UK inflation continues to run at a 40- year high, and the cost of living crisis is undoubtedly keeping Finance Minister Sunak and BoE Governor Bailey awake at night. Core CPI didn’t provide any relief, as it rose to 6.2%, up from 5.7% prior. This indicates that inflationary pressures are broad-based and aren’t about to ease anytime soon. The only positive in the CPI release was that it was a bit lower than the forecast of 9.1%, but I’m sure few in the City of London are taking any solace from that tidbit. The BoE has essentially raised the white flag on the inflation front, saying that many of the factors at play, such as the Ukraine war and soaring energy costs are beyond the Bank’s control. The BoE has warned that things could get worse, projecting that inflation will top 10% later this year and warning of a likely recession. Bailey & Co. are doing their best to catch up with the inflation curve as they aggressively hike rates while trying not to choke off economic growth. With the spectre of 10% inflation looming, confidence in the BoE may be ebbing. Like the Fed, the BoE has come under heavy criticism for not reacting to spiralling inflation quickly enough, and the 25-bps incremental hikes may not prove to be sufficient. The Fed has gone full throttle with a 50-bps hike and more to follow, and pressure is mounting on the BoE to follow suit. The US is also facing spiralling inflation, and Fed Chair Powell has signalled that the Fed will deliver 0.50% hikes in June and July. Former Fed Chair Bernard Bernanke weighed in on Fed policy, saying that it was a mistake for the Fed not to react earlier to rising inflation. Bernanke also warned that the US economy could face stagflation in the next year or two. . GBP/USD Technical GBP/USD has broken below support at 1.2436. Below, 1.2374 is under pressure There is resistance at 1.2557 and 1.2619   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Inflation hits 40-year high | Oanda

Inflation hits 40-year high | Oanda

Craig Erlam Craig Erlam 18.05.2022 23:14
European equity markets are a little flat on Wednesday, with inflation data this morning once again offering a reminder of the struggles that lie ahead. Not that we need reminding given all of the data we’ve seen recently. And then there are the gloomy forecasts from central banks, with even the Fed now targeting a softish landing which feels very much like the stage before a mild recession. It may be time to buckle up and prepare for a very bumpy year. Will BoE move to super-sized rate hikes? UK inflation is running at a 40-year high and it’s not peaked yet as the cost-of-living crisis looks set to squeeze the economy into recession. While annual inflation came in slightly below expectations at 9%, pressures are broad-based and as the year progresses, it is expected to hit double figures. There is still plenty more pain to come for households, most notably when the energy price cap increases again in October. But price increases are broad-based, as evident in the jump in core inflation to 6.2%. This comes as the Bank of England has warned of more pain and a probable recession, as it continues to aggressively raise interest rates in the hope of being able to catch up without inflicting too much harm in the process. Like many other central banks, it has been heavily criticised for its misjudged faith in pandemic-induced inflation being transient for too long. And in the UK’s case, the problem looks far greater and more widespread, with Brexit effects compounding the problems and driving up prices. Can the BoE afford to continue raising rates so gradually, as markets expect with 25 basis points every meeting or will they be forced to join their US counterparts with super-sized hikes? Pressure is mounting. The path of least resistance With risk aversion starting to creep back in, bitcoin finds itself back below USD 30,000 which may make some a little nervous. It was always going to be difficult for risk assets to significantly build on the rally in the current environment. What may be encouraging to some is that we haven’t seen a sharp reaction to the move back below such a key level. Of course, that could quickly change with below appearing to offer the path of least resistance. For a look at all of today’s economic events, check out our economic calendar: This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
US Close – Stocks Crumble, Oil lower on demand concerns, Gold holding up, Bitcoin lower | Oanda

US Close – Stocks Crumble, Oil lower on demand concerns, Gold holding up, Bitcoin lower | Oanda

Ed Moya Ed Moya 18.05.2022 23:12
US stocks are crumbling after Wall Street worries about economic growth after hearing a chorus of concerns of higher prices that won’t be easing anytime soon. The strength of the consumer will be tested as both Walmart and Target signal rising pricing pressures are not easing.  The Dow Jones Industrial suffered its worst loss since 2020 as investors doubt the Fed will be able to deliver a soft landing as the inflation outlook might warrant much more aggressive tightening of monetary policy.  The S&P 500 index fell below the 4,000 level which opened the door for a wave of technical selling.  Consumer discretionary got hit the hardest as investors are reassessing the timing of when inflation will ease.  It looks like the consumer has got a couple of rough quarters ahead and that will continue to drive economic growth concerns over the next few months.  Oil Crude prices tumbled as risk appetite fell off a cliff and China’s COVID situation took a turn for the worse.  The crude demand outlook is not looking as optimistic as it was a couple weeks ago.  The lower-income consumer will struggle with persistent pricing pressures that could lead to some crude demand destruction throughout what was supposed to be a very busy summer travel season.  China’s zero COVID policy will remain intact and that is why the crude demand outlook will get downgraded if more outbreaks occur. Beijing saw 69 new cases and Tianjin’s Binhai area saw two buildings put into lockdown.  The EIA crude oil inventory showed a surprise draw and a small recovery of US production.  The production increase is not matching the steady rise in rig counts, which suggests this market will remain tight. The 3.4 million barrel per day headline draw was also accompanied by a 5 million release from the Strategic Petroleum Reserve.      Crude exports increased by 3.5 million barrels a day last week, which supports the narrowing spread between Brent crude and WTI. The oil market is also witnessing a similar price for both Brent crude and WTI crude as the US oil demand outlook looks like it will remain extremely tight given expectations for a strong summer driving season.  Gold Gold prices did not break after carnage on Wall Street, which means some investors are fleeing to gold for safety.  The peak is in place for yields and that is good news for gold.  If gold can distance itself from $1800, technical buying could help send prices to $1850.  Bitcoin Bitcoin was dragged down alongside most risky assets as Wall Street suffered the worst loss in almost two years. Bitcoin remains a risky asset and vulnerable to further pain if the de-risking continues tomorrow. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Asian equities are mostly higher | Oanda

Asian equities are mostly higher | Oanda

Jeffrey Halley Jeffrey Halley 18.05.2022 23:10
Asia markets ex-China show gains US equities rallied strongly overnight as US retail sales, industrial production, and manufacturing outperformed, while hawkish comments from Powell and former Chair Bernanke were ignored. The S&P 500 shot higher by 2.02%, the Nasdaq leapt 2.76%, and the Dow Jones gained 1.35%. In Asia, US futures have eased as short-term specs have cashed out. Nasdaq futures are down by 0.40%, with S&P 500 and Dow futures easing by 0.20%.   The overnight rally sees most of the Asia-Pacific trading in the green today, although the retreat lower by US futures this morning has limited the gains. Another headwind has been China, which has been unable to shake off the weak house price data this morning, leaving it in the red. The Shanghai Composite has fallen by 0.37%, the CSI 300 is down by 0.65%, while Hong Kong’s Hang Seng has edged 0.35% lower. That comes despite an easing of Shanghai restrictions and very supportive tech comments by the vice-premier. My days are filled with people asking me is this the low of China stocks (especially tech), it’s so cheap, should I buy? The price action today suggests that more patience is required.   Elsewhere though, Asia is recording modest gains. Japan’s Nikkei 225 is 0.75% higher, with South Korea’s Kospi up just 0.10%. Taipei has jumped 1.40% higher, while Singapore has gained 0.75%. Kuala Lumpur has risen by 0.40%, with Jakarta adding 0.65%, Manila by 1.25%, with Bangkok unchanged. Australian markets have also followed Wall Street higher, the ASX 200 rising by 0.90%, and the All Ordinaries by 0.80%.   European markets are likely to take heart over the EU’s advice on natural gas payments to Russia, lessening the odds of interrupted supplies, for now, having booked large gains yesterday. Falling oil prices should also soothe nerves. New York markets will depend on whether the street wants to continue with the bear market rally, or not. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
"Risk-aversion lifts (USD) US dollar in Asia" | Oanda

(GSPC) The S&P 500 Saw Further Losses On Wednesday Amidst Retailers Earnings Reports, Pound Sterling CPI Inflation Data Exceeds Expectations

Rebecca Duthie Rebecca Duthie 18.05.2022 19:20
Summary: Retailers earnings reports weighing on investor sentiment, causing the S&P 500 to fall. The GBP may see some relief. Read next: (DJI) Retail Stocks Help Push Dow Jones Industrial Average Price Up, Another Crypto Loses Value In The Market  S&P 500 loses value. After a series of disappointing first quarter earning results from a number of retailers, the broader market has faced negative market sentiment. The poor results confirms the market's concerns regarding the rising inflation and the impact it is having on corporate profits. Earlier in the trading week, it seemed as though investor confidence was improving, the retailers earnings reports have counteracted that hopefulness. The poor performance from these major retailers has caused the S&P 500 stock price to fall almost 3% on Wednesday. S&P 500 Price Chart Pound Sterling CPI Inflation Report On Wednesday, the Pound Sterling experienced a knock on the foregn exchange market after UK CPI Inflation came out at 9%. Although the market was expecting a figure of 9.1%, the actual figure is 2% higher than the 7% reflected in March. Most of the inflation hike has been attributed to the rising energy costs experienced in April. The UK market and Pound Sterling may see some relief due to the CPI inflation target exceeding investor expectations. Read next: (TGT) Target Delivers Disappointing Earnings Results To The Market  Sources:,
Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform

Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform

Rebecca Duthie Rebecca Duthie 18.05.2022 18:40
Summary: What is the Litecoin Platform and how does it work? Advantages of the Litecoin exchange. Litecoin’s past, present and future price positions. Read next: Altcoins: What Is FTX (FTT Token)? - A Deeper Look Into The FTX Platform  The Litecoin Platform Litecoin is a peer-to-peer cryptocurrency and an open-source software project that was released unde the MIT/X11 license. Litecoin started in October 2011 as one of the first altcoins. Litecoin expands on the original Bitcoin (BTC) technology. Peer-to peer cryptocurrencies refer to transactions between two parties of some asset (such as digital currency) that does not require involvement from a central authority. LTC, Litecoins native coin LTC is the native cryptocurrency of the Litecoin Platform, the coins market capitailisation is over $4.7 billion, the current total circulating supply is 70.31 million coins and has a maximum supply of 84 million coins. Litecoin was the one of the first altcoins to enter the market, and currently sits in 21st position in terms of market capitalisation. Litecoin improved on the Bitcoin technology in a multitude of ways, some of these include faster processing speeds and lower transaction costs. The primary goal for Litecoin when it was launched, was to create another version of Bitcoin that is scalable and is aimed at smaller transactions. Is Litecoin a good investment? Although Litecoin does improve on Bitcoin technology, it still presents risks to investors. When the coin was first released, its technology was unique in the market, however since then, the uniqueness of the coins structure has began aging. Currently there are many other altcoins that are offering the same benefits and efficiency as Litecoin. Thanks to the age of Litecoin, this cryptocurrency holds value better than its younger altcoin counterparts who have smaller market capitalisations. Litecoin is a decentralised platform that has no censorship and is available to all. Users can send low cost, private, secure borderless payments to anyone they choose at anypoint and to anywhere in the world. Litecoin is blockchain secured, meaning that it is the largest global scrypt based network operating at 100% since 2011, tracasting and securing billions of dollars of value. Decentralised platform, it is not necessary to get approval to join the new age of money, it is easy to download a free exchange wallet and to invest in the future of finance. Evolving and immutable platform, Litecoins has lightning which is a development pioneers technology that allows instant global settlement of funds and atomic swaps for cross blockchain trustless trading. Where to invest in Litecoin: Users need to open a crypto exchange account, which will offer users access to a trading platform where they can buy and sell cryptocurrencies through placing buy and sell orders. Some examples or crypto exchanges that have Litecoin available: Coinbase, eToro, Gemini and many more. Advantages of investing in Litecoin (LTC): Lower transaction costs. With the Bitcoin platform, users lose part of their Bitcoin value when they transact between exchange wallets through a verification fee, this happens with Litecoin aswell, except the verification fee is lower than Bitcoins when transfers are initiated. Faster transaction speeds: the improved Litecoin network doesnt only extend its processing fees, it also allows users to send coins faster than the Bitcoin blockchain does. For example, the average Bitcoin transaction takes around 10 minutes whereas the average Litecoin transaction takes around 2.5 minutes. Open-source platfrom: the Litecoin platform is build on a naturally open-sourced fork of the Bitcoin Core Client. This makes it easier for the platform developers to implement new features and adjust the system in order to keep up with the ever-changing market. The platforms flexibility also allows the developers to implement software development security parts regularly in order to keep up with hackers and their innovative methods. Recognisability: Litecoin has been on the market for some time and despite its modern technological irrelevance, the coin remains one of the more well-known altcoins. Past, present and future prices of LTC In the past, it took Litecoin more than two years for its price to show any upward movements, this is likely due to the fact that cryptocurrency trading was not as popular back when they were first launched as they are now. Investors were even more uncertain of the crypto market than they are now. The price of Litecoin started to see some growth around the start of 2017, since then the price has fluctuated a lot, reflecting the volatility in the crypto markets. Since the start of the year the change in price of LTC has been less than -53%. Currently the broader financial markets have been taking strain, causing the cryptocurrency markets to express more than usual volatility. In the future analysts predict that the price of Litecoin (LTC) is expected to grow according to price predictions. Litecoin (LTC) Price Chart Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!?  Sources:,,,,

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