Risk appetite and global data flow peaking at key levels – Westpac

By FXStreet Richard Franulovich, Research Analyst at Westpac, suggests that the US Apr retail sales (Fri) and China Apr industrial production (Sat) will be crucial drivers of risk appetite in the near term.

Key Quotes

“Hopes for a Q2 US bounce have been left wanting so far, Apr ISM and payrolls data both weaker than expected. A stronger Q2 after a weak Q1 has been a regular feature in recent years, residual seasonality thought to be a key driver.

Yet another soft start to 2016 with Q1 growth of 0.5% suggests this bias may be at play again, but so far there’s little evidence of a Q2 bounceback. Apr retail sales will thus be key. Meanwhile China’s recovery appears to have stalled after barely a month, judging by the softer April PMI and imports data. Past stimulus cycles back to 2008 produced a recovery that typically lasted 4-5 months. April industrial production will be crucial.”
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Source:: FX Street