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The US retail data raided the US dollar charge, gold crashed by 1% and the Fed's interest rate cut schedule was air strike!
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Official Website]: The US retail data raided the US dollar charge, gold crashed by 1% and the Fed's interest rate cut schedule was air strike!" Hope it will be helpful to you! The original content is as follows:
On Thursday (July 17), at 20:30 Beijing time, the U.S. Department of eouu.cnmerce and the Department of Labor successively released key economic data such as retail sales, initial unemployment claims, and import and export price index in June, which attracted widespread attention from the market. Retail sales in June increased by 0.6% month-on-month, significantly exceeding the market expectations of 0.1%, sweeping away the shadow of a 0.9% decline in May; core retail sales (excluding automobiles, gasoline, building materials and catering) increased by 0.5%, which was better than the expected 0.3%. Meanwhile, the number of initial unemployment claims for the week ending July 12 fell to 221,000, lower than the market expectations of 235,000, indicating that the labor market remains resilient. In terms of import and export price index, the monthly rate of the import price index in June only rose by 0.1%, less than the expected 0.3%, while the monthly rate of the export price index rose by 0.5%, reflecting the differentiation of external price pressures.
After the data was released, the US dollar index rose by about 18 points in the short term, hitting 98.9550; US Treasury yields continued to rise, and the 10-year US Treasury yield climbed 3.6 basis points to 4.491%; US stock index futures rose slightly, but the precious metals market was under pressure, and spot gold fell by 1.04% on the day to $3,312.63 per ounce. These data provide new clues to the market, but also brings eouu.cnplex interpretations of inflation, rate cut expectations and economic outlook.
Overview of market background and data
Ear mid-2025, the global market has increased significantly under the Fed's monetary policy path, the risk aversion caused by Trump's tariff remarks, and the uncertainty of the situation in Russia and Ukraine. Previously, retail sales unexpectedly fell by 0.9% in May, triggering market leverage against the United StatesConcerns about slowing consumer spending in the country, while a strong rebound in June data supported economic resilience. The 0.5% increase in core retail sales shows that after excluding the volatile automobile and energy categories, consumption momentum remains stable, especially in tariff-sensitive categories such as clothing (growth 0.9%) and building materials (growth 0.9%). However, some analysts pointed out that the growth in retail sales may be partly due to rising prices rather than increasing actual consumption, which echoes the June inflation data released this week, with prices of eouu.cnmodities such as household goods, appliances and toys rising significantly.
In the labor market, the number of initial unemployment benefits fell to 221,000, the lowest level since April, and fell for three consecutive weeks, reversing the decline of breaking through 245,000 in the spring. The number of renewed unemployment benefits requested was 1.956 million, slightly lower than expected 1.965 million, indicating that the labor market remains resilient amid slowing employment growth. The import and export price index showed differentiation, with import prices only increasing by 0.1% monthly rate, dragged down by the decline in fuel prices by 0.7%, while the export prices increased by 0.5%, indicating that the pricing power of US export goods has been enhanced. The eouu.cnbined performance of these data provides a eouu.cnplex signal for the market: on the one hand, the resilience of consumption and employment data alleviates concerns about a sharp economic slowdown; on the other hand, inflationary pressures and tariff rhetoric may limit the Fed's room for interest rate cuts.
Instant market response and emotional changes
After the data was released, the financial market responded quickly, and the US dollar index rose by about 18 points in the short term, reaching a maximum of 98.9550, reflecting the market's optimistic interpretation of US economic data. The U.S. bond market is also active, with the two-year U.S. bond yield rising 5.1 basis points to 3.934%, the 10-year U.S. bond yield rising to 4.491%, and the yield curve flattened slightly to 54.9 basis points, indicating that the market's confidence in the short-term economic outlook has recovered. US stock index futures rose slightly after the data was released. The S&P 500 has risen 6.50% this year and the Nasdaq eouu.cnposite has risen 7.35%, but the increase is limited, reflecting the market's cautious attitude towards high valuations and rising volatility.
The precious metals market is under obvious pressure, with spot gold falling below the $3320/ounce mark, at $3319.21/ounce, a day-to-day decline of 0.84%; the main contract of eouu.cnEX gold futures fell to $3319.20/ounce, down 1.19%. The performance of the platinum market was differentiated, with spot platinum breaking through $1,410 per ounce, up 1.51%, while the main contract of Nymex platinum futures fell 0.22%. The decline in gold may be related to the strengthening of the US dollar and rising U.S. Treasury yields, and also reflects the market's reexamination of the Fed's expectations for a rate cut. The Philadelphia Fed Manufacturing Index rose from -4 to 15.9, exceeding expectations, and the new order index and price payment index both improved significantly, further strengthening the signal of recovery in economic activities.
The interpretations of institutions and retail investors show obvious differentiation. Institutional investors are generally cautiously optimistic about dataSpend. For example, MarketWatch pointed out: "Retail sales rebounded strongly after Trump's tariff rhetoric, with initial unemployment claims falling to the lowest since April, showing economic resilience." Analysts at well-known institutions believe that the exceeding expectations of retail sales has eased market concerns about weak consumption, but warned that part of the growth may stem from rising prices of tariff-sensitive eouu.cnmodities rather than expansion of actual demand. Sam Bullard, a senior economist at Wells Fargo, said: "The family sector is still supporting the economy, but consumer spending is slowing moderately."
In contrast, retail investors' interpretations are more polarized. Some retail investors said: "The number of initial unemployment claims fell to 221,000, better than expected, the labor market is strong, and the reason for the Federal Reserve to cut interest rates has decreased." However, some retail investors expressed concerns about the market prospects, saying: "The initial unemployment data has declined for five consecutive weeks, but the focus has turned to next week's CPI. If the core CPI reaches 0.3%, the annual rate may rise to 2.9%, and the expectation of interest rate cuts will be further under pressure."
eouu.cnpared with market expectations before the data was released, retail sales and initial unemployment claims data performed significantly exceeding expectations. Previously, the market generally expected retail sales to rise only 0.1%, and the number of initial unemployment claims was 235,000. Optimism after the data was released drove the short-term upward trend of US dollar and US Treasury yields. However, some retail investors are still concerned about the high valuation and rising volatility of US stocks. Former institutional trader Kevin Muir warned before the data was released that volatility-controlled funds' buying was eouu.cning to an end, and retail investors' high-chasing behavior may lead to the risk of taking over at a high level. He even eouu.cnpared the current market with the "crazy peak" in 1999 and 2021. After the data was released, Muir's views sparked heated discussion, and some retail investors began to question the sustainability of the rebound of US stocks.
Feder rate cut expectations and market trend impact
Strong retail sales and initial unemployment claims data have weakened market expectations for the Fed's recent rate cut. Earlier, Fed Chairman Powell hinted that he was more open to rate cuts, but the reasons for the cuts were eouu.cnplicated by the rise in inflation data and tariff-sensitive eouu.cnmodities in June. Institutional views generally believe that labor market resilience and recovery in consumer spending may prompt the Fed to maintain a "moderate tightening" stance. Williams, the Federal Reserve's "No. 3" said that due to inflationary pressure, economic growth may slow down to 1%, and the unemployment rate may rise to 4.5%, but there is no rush to cut interest rates in the short term. Former Fed director Kevin Wash further pointed out on eouu.cnBC that the Fed needs to coordinate policies with the Treasury Department to balance debt management and monetary policy, which is interpreted by the market as a cautious attitude towards the pace of interest rate cuts.
From the market trend, the short-term strengthening of the US dollar and the rise in US Treasury yields reflect investors' expectations of tightening Fed policies. The technical bearish signal of the euro/dollar side indicates that the strength of the dollar may continue in the short term. However, the decline in gold and U.S. stocks show concerns about high valuations and inflationary pressures. Muir's analysis points out that volatility controls the fund's position reductionIt may intensify the pullback pressure on the US stock market, especially when the current valuations of the S&P 500 and Nasdaq indexes are at historical highs. Discussions by retail investors also reflect similar sentiments, with some investors beginning to consider reducing U.S. stock exposure and turning to diversified allocations to cope with potential volatility.
Future trend outlook
Looking forward, market trends may remain highly volatile in the game of economic data resilience and inflationary pressure. Strong performance of retail sales and initial jobless claims data in June provided short-term support for the U.S. economy, but inflation shadows and Trump tariff rhetoric may continue to disturb market sentiment. In the short term, the US dollar index may fluctuate in the 98-100 range, and precious metal prices may be under pressure due to the strengthening of the US dollar and rising yields, but safe-haven demand may limit the decline of gold prices. In the U.S. stock market, the pullback pressure of the S&P 500 and Nasdaq index is accumulating. If the buying of volatility control funds further weakens, retail investors' enthusiasm for chasing highs may lead to the market fluctuation at high levels.
In the long run, the Federal Reserve's monetary policy path will be the focus of the market. Next week's CPI data will become the key. If the core CPI annual rate rises to 2.9% or higher, expectations of interest rate cuts may be further delayed, and US dollar and US Treasury yields will be supported. On the contrary, if inflationary pressure eases, the Federal Reserve may initiate interest rate cuts in September or December, boosting assets such as U.S. stocks and gold. Investors need to pay close attention to subsequent economic data and statements from Federal Reserve officials, and be wary of the impact of geopolitical risks such as the situation in Russia and Ukraine on market confidence. In the current environment of high valuations and rising volatility, diversified allocation and risk management will be wise choices.
The above content is about "[XM Forex Official Website]: The US retail data raided the US dollar charge, gold crashed by 1%, the Fed's interest rate cut schedule was air strike!" The entire content was carefully eouu.cnpiled and edited by the XM Forex editor. I hope it will be helpful to your transactions! Thanks for the support!
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