Good news keeps on rolling in for the buck

US jobless claims hit a fresh 50 year low, dropping by 5000 to 192,000. US retail sales surged in March, up 1.6% since February versus 0.9% increase expected. This is the biggest jump in sales since 2017, as sales rebound from a sluggish period dating back to December. The healthy jobs market is clearly giving confidence to US consumers; this eagerness to spend is supporting the economy. Should data like this continue to pour out of the US, the Fed might be less patient about tightening policy. The prospect of a less patient Fed is boosting the dollar.  Stocks on Wall Street opened on the front foot, as strong data fed the risk on sentiment.

EZ manufacturing still stuck in a rut

Over in Europe the Dax remained buoyant but the euro took a hit falling back to a low of $1.1236 as data showed that Europe’s manufacturing sector remains stuck in a rut. 
The German manufacturing pmi edged higher to 44.5, up from 44.1, but still below forecasts of 45. The French manufacturing pmi also missed expectations falling to 49.6 from 49.7. For the bloc as a whole, manufacturing pmi rose slightly to 47.8 although missing expectations. 50 separates expansion from contraction.  

Investors who were hoping for the pmi data to show that the slowdown in the eurozone was bottoming out will be disappointed. Whilst these figures do show some signs of improvement, the overall outlook for manufacturing remains deeply concerning, with output continuing to contract at a remarkable rate. There were some bright spots to the data; for example, the German service sector which remains resilient despite a weakening manufacturing picture. 

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