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This article is originally referred from Orbex Market Review.
The currency markets continued to trade mixed through the week.
While geo-politics kicked off the week with the U.S. and its allies striking Syria, the muted response from Russia saw the markets shrug off the event.
On the economic front, data this week saw the release of the U.S. retail sales report and a number of FOMC member speeches ahead of the Fed meeting due later in a few weeks time.
The Bank of Canada’s monetary policy decision saw interest rates being left unchanged but Gov. Poloz signaled further rate hikes this year.
U.S. retail sales rebound on surge in auto sales
The monthly retail sales report released by the U.S. Commerce department last week showed that retail sales increased more than expected in the month of March.
The gains came about on a strong rebound in auto sales which was more than expected.
The report showed that retail sales rose 0.6% on the month in March following a 0.1% decline in February.
This was higher than forecasts which pointed to a retail sales increase of 0.4% during the month.
Official data from the U.S. Labor department showed that headline CPI fell 0.1% on a month over month basis in March.
However, this still brought the annual CPI rate to 2.4% marking the highest level so far.
The monthly decline in headline CPI was however the first decline since May 2017.
The report showed that the gains came primarily on account of a rebound in motoro vehicle and parts dealers.
Auto sales surged 2.0% on the month and offset the previous month’s decline of 1.3%.
Excluding auto sales, retail sales were seen rising 0.2% on the month in March, matching the median forecasts.
The increase in the retail sales excluding autors came on a surge in the health and the personal care stores which rose 1.4% on the month.
Non-retail sales such as furniture and home furnising stores also posted modest growth during the month but there were declines in sectors such as sporting goods, hobby, books and music stores.
The core retail sales which excludes the automobiles, gasoline, building materials and food services was seen rising 0.4% on the month in March.
The gains in the core retail sales came after an unchanged print in the previous month.
On a year over year basis, retail sales were seen rising 4.5% in March compared to the year before.
Bank of Canada leaves interest rates unchanged
The latest trade balance figures from Germany showed a bleak picture as exports were seen falling at the fastest pace in over two years.
The decline in the exports and imports come amid global uncertainty and fears of a trade war after President Trump announced a series of measures to The decline in February was the second consecutive month of declines in the exports and was also the largest pace of decline since August 2015.
German exports declined 6.1% during August 2015. the month before.
Imports to Germany also declined on a month over month basis and fell for the second month in a row.
German imports fell 1.3% on the month extending the declines of 0.2% that was registered in January.
Economists had forecast that German imports would rise 0.5% and offset the declines from January.
Due to the decline in imports and exports, the German trade surplus decreased to a seasonally.
China GDP maintains 6.8% growth
China’s gross domestic product (GDP) was seen expanding at an annual rate of 6.8% during the three months ending March 2018.
This marked an unchanged print from the previous annual GDP growth rates from the past two quarters.
Economists polled, forecast that the world’s second largest economy might have expanded at a pace of 6.5%.
With the first quarter GDP data, China’s economy has been advancing at a steady pace and stays just above the target GDP rate of 6.5%.
Most of the gains from the GDP growth was seen coming from increased consumer demand.
The higher pace of increase on the consumer side was seen coming on account of improved wages in urban areas.
China’s retail sales was seen rising over ten percent as a result marking a faster than expected pace of increase.
Most of the gains in the retail sector were through a broad base of categories indicating that consumer spending was not seasonal.
Real estate sales were also higher alongside higher exports. The surge in exports was attributed to firms rushing to deliver orders ahead of further trade tariffs that would be imposed by the U.S. President Trump.
Original Source: Orbex Market Review