Weaker US-retail prolong tapering

Weaker than expected US retail forecasts presented yesterday, backed the view that the US Federal Reserve (FED) will hold off reducing its bond buying stimulus anytime soon. This had the Asian Pacific MSCI-index to inch another 0,1 %. DXY, the US dollar index measured against a basket of six major currencies edged lower. Euro/USD is steady at 1.3071while the Japanese Yen lost  ground against the green back at 99,77 yen a dollar. The Australian dollar was slightly stronger as the Reserve Bank of Australia kept its monetary policies unchanged.

F ED Chairman Ben Bernanke is Wednesday going to present its twice-yearly monetary policy report to Congress giving new clues to FEDs thinking on when to start tapering. US stocks were slightly up on Monday with Boeing, up 3,72 % as the winner. Citigroup presented strong quarterly results and the S&P to end higher for the eighth straight day which is the longest streak since mid-January. US retail sales data increased 0,4 %, half the rise economist had forecasted.

FED has focused on labour market improvements to decide when to start tapering monetary easing, but weakness in the consumer sector could indicate broader economic problems and lower US growth expectations.  There is no big changes in the currencies picture, but the yen can face new pressure as the week progresses.  Forthcoming elections to the upper Japanese chamber might result in a big victory for Shinzo Abe’s party and give new momentum for aggressive monetary easing.

The Euro keeps steady, but a slide in German exports, political wrangling over austerity measures in Portugal and opposition leaders in Spain asking for Primes Minister Mariano Rajoy to step down after a financial scandal in his party, create fresh concern as to the further direction of the common currency. Commodities were mixed after the presentation of China’s GDP yesterday. Both New York crude, NYMEX, and Brent are keeping up. Gold I slightly lower at USD 1080 an ounce.

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