Market data is still supportive for risk assets, but we need to watch how the dollar reacts.
Today’s data showed weaker US consumption and sentiment: headline retail sales missed, core retail sales were negative, and consumer sentiment also came in below expectations. Business inventories missed as well, although that’s a secondary indicator.
The overall picture leans toward weaker growth and a softer dollar, which can support gold and BTC. The complication is that inflation expectations ticked higher, so the reaction in DXY and Treasury yields matters more than the headline data alone.
Unfortunately, we’re heading into the weekend, so liquidity is thinning. Gold is still pricing in a choppy reaction, while BTC is recovering gradually.
If the dollar and yields continue lower, the market can interpret this as further confirmation of disinflation and a more dovish Fed path. If they move higher despite the weak data, risk assets could struggle. #Market_Update
Today’s data showed weaker US consumption and sentiment: headline retail sales missed, core retail sales were negative, and consumer sentiment also came in below expectations. Business inventories missed as well, although that’s a secondary indicator.
The overall picture leans toward weaker growth and a softer dollar, which can support gold and BTC. The complication is that inflation expectations ticked higher, so the reaction in DXY and Treasury yields matters more than the headline data alone.
Unfortunately, we’re heading into the weekend, so liquidity is thinning. Gold is still pricing in a choppy reaction, while BTC is recovering gradually.
If the dollar and yields continue lower, the market can interpret this as further confirmation of disinflation and a more dovish Fed path. If they move higher despite the weak data, risk assets could struggle. #Market_Update