US: Retail Sales stay unchanged at $684 billion in September

Retail Sales in the US stayed unchanged in September.

US Dollar Index clings to strong daily gains above 113.00.

The data published by the US Census Bureau showed on Friday that Retail Sales in the US, adjusted for seasonal variation, holiday and trading-day differences but not for price changes, stayed virtually unchanged at $684 billion in September. This reading followed August's increase of 0.4% and came in below the market expectation of +0.2%.

"Total sales for the July 2022 through September 2022 period were up 9.2% from the same period a year ago," the publication further read. "The July 2022 to August 2022 percent change was revised from up 0.3% to up 0.4%."

Market reaction

The US Dollar Index showed no immediate reaction to this data and was last seen rising 0.55% on the day at 113.08.

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U.S. Futures Rise as Amazon, Apple Shares Surge Before Market Open

U.S. stock markets are set to open higher Friday, set to end the week on a positive note on the back of strong earnings from tech giants Amazon and Apple.

By 6:46 AM ET (1046 GMT), Dow Jones futures were up 109 points or 0.34%, S&P 500 futures rose 0.77%, and Nasdaq 100 futures increased by 1.17%.

The main indices are on course for a second positive week in a row, with generally strong corporate earnings holding sway even after the Federal Reserve hiked interest rates by a further 75 basis points and GDP contracted for the second quarter in a row.

The blue-chip Dow Jones Industrial Average is 2% higher so far this week, while the broad-based S&P 500, and the Nasdaq Composite have both gained 2.8%.

Highlighting the session today will be earnings from the Big Tech sector, with both Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) surpassing expectations with their quarterly results released after the close on Thursday.

Shares in Amazon zoomed higher by more than 12% in premarket trade, thanks to a revised outlook from the company that offset slower net sales growth compared to the same period last year. Amazon now expects a jump in third quarter revenue, citing bigger fees from Prime loyalty subscriptions and resilient consumer demand.

Apple also forecasted strong demand for its flagship iPhone product despite consumers tightening other spending as economic growth slows. The firm also declined to give specific revenue guidance due to economic uncertainty but said annual sales should rise faster in the current quarter than the 2% growth it posted in the just-ended last three months.

Shares in Apple edged into the green by 2.28% in premarket trading.

A fresh batch of European data also helped ease some risk sentiment. The 19-nation Eurozone grew surprisingly strongly in the second quarter, defying expectations of a slowdown and the previous day’s weak U.S. release. Healthy performances in Spain, France, and Italy helped offset stalling growth in Europe's biggest economy, Germany.

However, inflation - which has weighed heavily on business and consumer activity in the region - came in at a new record high of 8.9% compared to the prior year, up from 8.6% in June. Analysts had been anticipating the number to stay at that prior level.

Concerns still remain that the Eurozone will tip into a recession either late this year or early next year despite the strong second quarter.

Meanwhile, crude oil prices moved up on Friday, helped by supply concerns ahead of next week’s meeting of a group of top producers even amid fears of a global recession.

By 7:08 AM EST (1108 GMT), U.S. crude futures were up 2.33% at $98.67 a barrel, while Brent crude was up 2.21% at $104.08 a barrel.

Additionally, gold futures popped slightly to $1,759.40/oz, while the EUR/USD was trading at $1.0225.

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USD/JPY flirts with daily low, still comfortable above 135.00 mark ahead of US data/Powell

USD/JPY extended the overnight pullback from a 24-year high and edged lower for the second straight day.

Speculations that authorities could intervene, along with recession fears underpinned the safe-haven JPY.

Modest USD strength, the Fed-BoJ policy divergence support prospects for the emergence of some dip-buying.

The USD/JPY pair witnessed some selling for the second straight day on Thursday and moved further away from a 24-year high, around the 136.70 region touched the previous day. The pair maintained its offered tone through the mid-European session and was last seen trading just below mid-135.00s, down over 0.60% for the day.

Traders turned cautious and opted to lighten their bullish bets around the USD/JPY pair amid speculations that any further depreciation of the Japanese yen might force some form of practical intervention. Apart from this, the worsening global economic outlook drove haven flows towards the JPY and exerted downward pressure on the major.

Investors remain sceptic that major central banks could hike interest rates to curb soaring inflation without affecting economic growth. Adding to this, the disappointing release of the flash Eurozone PMI prints for June further fueled worries about a possible recession and boosted demand for traditional safe-haven assets.

Bearish traders further took cues from declining US Treasury bond yields, though the emergence of fresh US dollar buying helped limit deeper losses for the USD/JPY pair, at least for now. The USD drew support from firming expectations that the Fed would stick to its aggressive policy tightening path to combat stubbornly high inflation.

In fact, the markets have been pricing in another 75 bps rate hike move at the upcoming FOMC policy meeting in July. The bets were reaffirmed by Fed Chair Jerome Powell's remarks on Wednesday, saying that the ongoing rate increases will be appropriate. In contrast, the Bank of Japan remains committed to keeping interest rates very low.

It is worth recalling that the BoJ last week decided to maintain the massive stimulus programme and vowed to defend the 0.25% cap for the 10-year JGB yield to support a still-fragile economy. This, along with a turnaround in the global risk sentiment, assisted the USD/JPY pair to find support ahead of the 135.00 psychological mark.

The fundamental backdrop supports prospects for the emergence of some dip-buying around the USD/JPY pair. Hence, the negative move witnessed over the past two trading sessions might still be categorized as a corrective pullback and is more likely to be bought into, warranting some caution for aggressive bearish traders.

Next on tap is the US economic docket, featuring the release of the usual Weekly Jobless Claims data and the flash PMI prints for June. Traders will also take cues from Fed Chair Jerome Powell's second day of testimony. Apart from this, the US bond yields, the USD price dynamics and the broader risk sentiment might provide some impetus to the USD/JPY pair.

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