Economic data in the spotlight yet again - Market Overview

Economic data in the spotlight yet again -  Market Overview

The markets’ eyes were glued on economic data today. And the reports have indeed impressed.

On the one hand, the Unemployment Claims report has negatively surprised the market with a figure of 576k, a considerable drop compared to the expected 700k, and a correction of the previous week's data of 769k.

A good figure for the labour market was the low number of unemployed people and therefore served as an anticipation of a better Non-farm Payroll figure and a fall in the unemployment rate.

On the other hand, March's retail sales data has exceeded forecasts. They grew by 8.4%, with an average forecast of 5% and a notable rise compared to the previous month's fall of 2.5%.

This figure is somewhat devalued because a large part of it is due to the vehicle sales component that has experienced a notable increase during March and therefore can be considered a seasonal factor.

In any case, the data is still very favorable for the expectations of the economy's recovery.

To these two results we must add the Philadelphia Fed Manufacturing Index figure for April, which retreated to 50.2 from a forecast of just 42.

Therefore, all the data published today goes in the same direction. Overall, this is a more positive performance of the North American economy, anticipating an early recovery.

However, the market reaction has been somewhat mixed. On the one hand, the yields of the American treasury bonds have fallen after the reports. For Tnote, the yield has fallen 3 bps to 1.59%. However, the 10-year American bond, as we can see in the daily chart, rose in price to a pivot zone located around 132.30, above which, from a technical point of view, a corrective upward movement of greater depth could begin.

In the currency market, the U.S. Dollar has strengthened marginally. EUR/USD failed to break above the resistance zone around 1.9990, shyly retreating to 1.1950 but with insufficient intensity. From a technical perspective, only below this level would it open the way for losses to the 1.1920 area. Below that level, it would already find more important support at 1.1880.

Sources: Bloomberg, reuters.com.

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