We are starting the new week with a relatively busy calendar, even though London remains closed today for the UK bank holiday. Despite that, the markets are already showing some interesting moves. Overnight, New Zealand retail sales surprised to the upside, coming in at 0.5% compared to expectations of 0.1%. That gave a solid boost to the New Zealand dollar, making it one of the strongest currencies this morning. From Europe, we also had the German IFO business climate reading, which landed at 89, slightly above forecasts and providing cautious optimism for the eurozone outlook. Still ahead of us are new home sales from the US, which will be published after the American market open.
Traders are also digesting the impact of Jerome Powell’s speech from Friday, which brought significant volatility. His remarks strengthened sentiment on indices, gave a push to gold, and at the same time triggered a broad weakening of the US dollar. As the new week begins, futures are opening in the red, suggesting that we are simply seeing a natural correction after those sharp Friday moves.
On the currency side, the strongest performers this morning are the antipodean currencies, led by the New Zealand dollar on the back of data. North American currencies — the US dollar and Canadian dollar — are also trading with strength. Over in commodities, metals are starting the week on the back foot. Gold, silver, and platinum are all edging lower, correcting Friday’s gains. Oil, on the other hand, is relatively steady, awaiting fresh momentum.
So far, Monday feels like a day of retracement rather than trend-setting. After Friday’s strong impulses, today’s moves look like a pause and correction, which may well remain the theme for the rest of the session.