US MORNING: Stocks Rally Fizzles as Economic Reality Sets In


US retail sales drop 8.7%, industrial production down 5.4%

The UK to review social distancing measures

US dollar shines as safe haven trades return



Stocks Lower

Halfway through the trading day, US stocks are trading lower by about 2.5% after a volatile session. US shares traded lower into the first piece of economic data to be released this week and extended their decline after the release of the retail sales figure for March, which marked an 8.7% decline year-on-year.

The Empire State manufacturing survey followed with a print of -78, way below expectations. The figure suggested that the ISM manufacturing print for April could come as low as 35. Stocks traded lower after the market open, with major benchmarks also weighed by new lows in WTI oil prices.

USD Roars Back

The US dollar index traded over 1% higher after the slew of weak economic releases, as the safe-haven bid for the Greenback returned. A strong rally against commodity currencies was particularly notable, as antipodean currencies suffered most, with the AUDUSD and NZDUSD trading lower by 1.7% each.

Gold and silver didn’t remain insulated from the broad USD strength, tracking lower 1% and 2.5%, respectively. Despite the decline, gold remains close to multi-year highs, marked at $1747 in late US trading yesterday.

UK Government to Review Social Distancing

The UK Prime Minister’s spokesperson shared that the UK government is reviewing social distancing measures. The announcement sparked a rally of the British pound in speculation for an official statement, which will be released tomorrow.



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