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Retail and food services sales rose 0.5% month-over-month (m/m) in April, in line with consensus expectations. However, sales gains were largely due to higher prices, with inflation picking up in April, real retail and food services sales fell 0.2% m/m.

To no surprise, higher gasoline prices were part of the story, with sales at gasoline stations rising 2.8% m/m after a 14% increase in March. Meanwhile, sales of autos and parts fell 0.4% m/m and building materials and garden retailers rose only 0.1% m/m.

Looking at the “control group”—which excludes volatile sales of gasoline, autos & parts and building materials and garden equipment— sales rose 0.5% m/m, also in line with expectations. Sales in other categories were mixed. Furniture and home furnishings stores gave back March's gain (-2.0% m/m), clothing sales fell (-1.5% m/m), while general merchandise stores (+0.1% m/m) and health and personal care stores (-0.0% m/m) were basically flat. Strength was seen in electronics and appliances (+1.4% m/m) and sporting goods stores (+1.4% m/m).

Sales at non-store retailers, mostly online sales, posted another solid monthly increase (+1.1% m/m), and were up 11% from a year-ago.

Spending at bars and restaurants – the only service category included in the report – rose a healthy 0.6% m/m in April after a soft March reading.  Zooming out on the longer-trend spending is only up 2.8% y/y, down from 6.9% growth a year ago.

Key Implications

As expected, retail and food services—which are measured in nominal terms—rose in April, boosted by higher prices. The drop in real sales does come after two solid months in February and March, and real sales are up 1.0% y/y. The softness in real terms is mitigated somewhat by a decent gain in "core" sales in April, coming on top of upward revision to the prior two months. Core sales were up a solid 5.7% y/y, pointing to still solid gains in real terms, and recent trends point to renewed momentum after a soft winter.

Overall, the upward revisions to prior months should give a bit of a boost to consumer spending in the first quarter, and have started the second quarter with decent momentum. That said, consumers are still contending with higher gasoline prices May, and that is likely to take a toll on discretionary purchases. In the near-term, higher tax refund checks and lower income taxes will provide some cushion.

Daily Pivots: (S1) 1.1688; (P) 1.1714; (R1) 1.1734; More….

EUR/USD dips slightly today but stays in established range. Intraday bias remains neutral for the moment. Further rise is expected with 1.1642 support intact. On the upside, firm break of 1.1848 will target 1.2081 high next. However, firm break of 1.1662 support will indicate the the rebound from 1.1408 has completed, and bring deeper decline back towards this low instead.

In the bigger picture, the strong support from 38.2% retracement of 1.0176 to 1.2081 at 1.1353 suggests that the pullback from 1.2081 is more likely a corrective move. Strong support was also found in 55 W EMA (now at 1.1539). Focus is back on 1.2 key cluster resistance level. Decisive break there will carry long term bullish implications. Nevertheless, break of 1.1408 support will revive the case of medium term bearish trend reversal.

Risk sentiment remained broadly stable on Thursday as US equity futures edged higher alongside European stocks, extending the optimistic tone already dominating global markets this week. But while equities continued drifting along the existing AI- and liquidity-driven rally, oil markets delivered a far more cautious verdict on the opening phase of the Trump-Xi summit in Beijing.

The key issue remains the Strait of Hormuz. Following talks between President Donald Trump and Chinese President Xi Jinping, the White House stated that both leaders agreed “the Strait of Hormuz must remain open to support the free flow of energy.” According to Washington, Xi also expressed opposition to “the militarization of the strait and any effort to charge a toll for its use,” while both sides reaffirmed that “Iran can never have a nuclear weapon.”

However, the Chinese side delivered a far more restrained public statement. China’s Foreign Ministry merely stated that the two leaders “exchanged views on major international and regional issues, such as the Middle East situation, the Ukraine crisis, and the Korean Peninsula,” without explicitly referencing Hormuz, Iran, maritime security, or energy flows.

That discrepancy appears to have prevented energy traders from embracing the summit as a meaningful geopolitical breakthrough. Brent crude dipped modestly below $105 but remained elevated overall, suggesting markets still see substantial war premium embedded in oil prices. If investors truly believed the Strait of Hormuz was on a credible path toward normalization, oil prices would likely be falling much more aggressively.

Equity investors are still willing to maintain the broader risk-on narrative supported by AI optimism and resilient global liquidity conditions. But oil traders continue signaling that the underlying geopolitical crisis has not actually been resolved. As long as the threat of partial blockage, tanker disruption, or Iranian “toll” measures remains alive, the war premium is unlikely to disappear from energy markets.

The concern now is that if diplomacy fails to deliver more concrete progress during the second day of talks, Washington could eventually pivot back toward a harder security response. Without operational guarantees on shipping access, the US may eventually return to naval escort operations or even military strike preparation to force the Strait open.

In currency markets, Dollar regained the top position for the week as stronger US inflation data continued supporting expectations for higher-for-longer Fed policy. Aussie remained the second strongest performer thanks to resilient risk appetite, while Loonie benefited from still-elevated crude prices. Sterling remained the weakest major currency amid continuing UK political instability, followed by Yen and Euro.

GBP/AUD Sinks to 1½-Year Lows as Aussie Risk Rally Meets UK Political Paralysis

GBP/AUD fell to fresh 2½-year lows as markets increasingly favored Australia’s growth-and-yield story over Britain’s rising political uncertainty. AI-driven risk appetite, hawkish RBA expectations, and Sterling’s growing political discount continue reinforcing the pair’s bearish trend. Read More.

Silver's Momentum Stalls Below $90, but Bigger Breakout Risks Are Building

Silver momentum slowed near $90, but narrowing Gold-Silver Ratio and strong industrial demand continue building the case for a larger breakout toward $100. Read More.

US Retail Sales Rise 0.5% in April, Reinforcing Resilient Demand

US retail sales rose 0.5% in April while core spending measures came in stronger than expected, reinforcing the view that consumer demand remains resilient despite elevated inflation and higher interest rates. Read More.

US initial jobless claims rise to 211k vs exp 205k

US jobless claims rose slightly above expectations last week, suggesting the labor market is gradually cooling but still remains relatively resilient overall. The data is unlikely to shift the Fed’s focus away from persistent inflation risks for now. Read More.

UK GDP Expands 0.6% in Q1, up 0.3% in March

Britain’s economy held up better than expected in early 2026 as stronger services and construction activity lifted both quarterly and monthly GDP growth. The figures offer some reassurance for policymakers even as rising energy costs and political instability continue clouding the outlook. Read More.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1688; (P) 1.1714; (R1) 1.1734; More….

EUR/USD dips slightly today but stays in established range. Intraday bias remains neutral for the moment. Further rise is expected with 1.1642 support intact. On the upside, firm break of 1.1848 will target 1.2081 high next. However, firm break of 1.1662 support will indicate the the rebound from 1.1408 has completed, and bring deeper decline back towards this low instead.

In the bigger picture, the strong support from 38.2% retracement of 1.0176 to 1.2081 at 1.1353 suggests that the pullback from 1.2081 is more likely a corrective move. Strong support was also found in 55 W EMA (now at 1.1539). Focus is back on 1.2 key cluster resistance level. Decisive break there will carry long term bullish implications. Nevertheless, break of 1.1408 support will revive the case of medium term bearish trend reversal.

US retail sales rose 0.5% mom in April, matching market expectations and reinforcing the view that consumer demand remains resilient despite rising inflation pressures and elevated interest rates. Core readings were slightly firmer, with retail sales excluding autos rising 0.7% mom, above expectations of 0.6% mom, suggesting underlying household spending momentum remains relatively healthy.

The broader breakdown of the report also pointed to stable domestic demand conditions. Retail sales excluding gasoline increased 0.3% mom. The closely watched control group excluding both autos and gasoline rose 0.5% mom. The data suggests consumers continue spending even as higher energy prices linked to the Middle East conflict begin filtering through the broader economy.

On a longer-term basis, total retail sales for the February through April period were up 4.4% compared with the same period a year earlier.

Full US retail sales release here.

US initial jobless claims rose 12k to 211k in the week ending May 9, coming in slightly above expectations of 205k and signaling some modest cooling in labor market conditions. The four-week moving average of initial claims, which helps smooth weekly volatility, also edged higher by 750 to 203.75k.

Continuing claims increased by 24k to 1.782m in the week ending May 2, suggesting unemployed workers are taking slightly longer to find new jobs. Still, the broader trend remains relatively stable, with the four-week moving average of continuing claims dipping slightly to 1.781m.

Full US jobless claims release here.

• The futures market is mistaken in expecting 2–3 ECB rate hikes in 2026.
• Accelerating US inflation will prompt the Fed to adopt a more hawkish stance.

The US dollar took two steps forward and one back following another batch of hawkish macroeconomic data and new record highs for US indices. NVIDIA’s market capitalisation rising to $5.5 trillion triggered an S&P 500 rally, boosted global risk appetite and reduced demand for the greenback as a safe-haven asset. Bears on EURUSD were unable to fully capitalise on the sharpest PPI acceleration since 2022, up to 6% in April.

The Fed prefers to gauge inflation using the Personal Consumption Expenditures (PCE) index. Based on CPI and PPI data, core PCE could accelerate to 3.3% in April. Coupled with the stabilisation of the labour market, this gives CME derivatives a probability of over 30% of a rate hike in 2026, rising to 50% by March 2027.

Meanwhile, the ECB has signalled that it may not share the view of Bloomberg experts and the futures market that there will be 2–3 rate hikes of 0.25 percentage points this year. Executive Board member Olli Rehn stated that the eurozone is on the brink of a stagflationary shock, whilst Chief Economist Philip Lane believes that a contraction in domestic demand will make it difficult to adjust monetary policy.

The yen found its footing after three days of selling following an OECD statement that the Bank of Japan would raise its overnight rate to 2% by the end of 2027. It must continue its cycle of monetary tightening to prevent the economy from overheating.

From the perspective of the bond yield spread, USDJPY looks overbought. This allows the government to argue that the pair has become detached from economic fundamentals. However, speculators are betting on high oil prices, carry trades and strong demand for the US dollar as a safe-haven asset.

The pound continued to fall amid comments from central bank officials. Sarah Breeden believes that the Bank of England cannot wait forever, but that monetary policy tightening is not required in either June or July. Previously, traders were buying GBPUSD on expectations of three rate hikes in 2026 but rising political risks and the BoE’s dovish rhetoric are forcing them to offload sterling.

Market Overview

The crypto market has been retreating towards the lower end of the range seen over the last couple of weeks, near $2.61T, but at the time of writing has pared its losses to around 1% over the past 24 hours, trading at $2.66T. Once again, the cryptocurrency market is underperforming the stock market, which buyers have pushed to new highs. A key reason for buyers’ caution is the anticipation of the vote on the CLARITY Act. The best performers over the last day have been Dogecoin (+2.4%), Immutable (+2%) and Tron (+0.3%). The biggest declines among the most popular coins were seen in Theta (-8.3%), Internet Computer (-7.8%) and Toncoin (-6.9%).

The sentiment index has fallen for the second day in a row, dropping to 34 from 49. Alongside lagging equities, weak sentiment, and the inability to move into ‘greed’ territory, this is further evidence that cryptocurrencies are not ready to enter a long-term bull market.

Bitcoin fell below $79K at the low point of a 6-hour sell-off on Wednesday evening. A significant catalyst for the sell-off was data showing an acceleration in producer price inflation, prompting a reassessment of the Fed’s plans for the key interest rate. However, right at the start of the new day, buyers are once again in the driving seat, pushing the price of the leading cryptocurrency towards $80K. The stock market quickly digested the negative inflation news, which also bolstered the confidence of cryptocurrency buyers. The declining 200-day MA remains an important line of resistance, serving as a stark reminder of the market’s bearish phase.

News Background

Higher inflation figures have reduced risk in Bitcoin derivatives. Open interest on major crypto exchanges has fallen by nearly $1.25 billion, CryptoQuant notes. Rising inflation is undermining the narrative of a more accommodative monetary policy.

Financial giant Charles Schwab has launched direct trading in Bitcoin and Ethereum, opening access to an initial group of retail clients. Previously, the company offered only indirect investments via ETFs and derivatives.

21Shares has launched the first spot ETF based on Hyperliquid. The fund provides access to the Hyperliquid token without requiring the purchase of the asset, and it includes staking rewards. The Hyperliquid ETF raised $1.2 million on its first day of trading.

The Solana blockchain update, known as Alpenglow, which will increase transaction efficiency 100-fold, is one step closer to deployment on the mainnet. The upgrade has entered the public testing phase and could be ready for launch on the mainnet as early as the third or fourth quarter of this year.

GBP/AUD extended its medium-term downtrend this week, briefly breaking below the 1.86 handle and falling to its lowest level since late 2023 as markets increasingly favored the Australian Dollar’s strong growth and yield profile over Sterling’s mounting political and policy uncertainty.

On the Australian side, the story remains overwhelmingly supportive.

The Australian Dollar continues benefiting from one of the strongest macro combinations in global currency markets right now: resilient global risk appetite, elevated yield expectations, and continued AI-driven equity optimism. Global stock markets have remained remarkably strong this week, with NASDAQ, Nikkei, and KOSPI all extending toward fresh highs as investors continue pouring into technology and semiconductor-linked assets. As one of the world’s highest-beta major currencies, AUD tends to outperform strongly during periods of broad “risk-on” sentiment.

Yield expectations are providing additional support. Even after three rate hikes already this year, markets are aligning with the RBA’s own projections that the cash rate could climb toward 4.70% by year-end as policymakers continue confronting sticky inflation pressures tied partly to higher energy costs. That hawkish outlook continues widening the policy contrast against other major central banks where uncertainty and caution are becoming more dominant.

Sterling, by contrast, is increasingly trading under a cloud of uncertainty.

Sterling, meanwhile, is weighed down by a growing “uncertainty discount.” Although recent UK economic data has shown some resilience — including stronger-than-expected GDP growth — investors remain increasingly uneasy about both the political outlook and the Bank of England’s policy direction. The BoE’s April decision to hold rates at 3.75% with a heavily split 8–1 vote reinforced the perception that policymakers are trapped between persistent inflation risks and concern about damaging a fragile recovery.

Politics has become the larger problem. Following Labour’s disastrous May 7 local election results, where the party reportedly lost more than 1,300 council seats and control of 35 councils, pressure on Prime Minister Keir Starmer has intensified sharply. Reports of possible leadership challenges later this year have added a growing political risk premium into Sterling pricing as investors worry Britain may face prolonged policy instability just as markets are already becoming more sensitive to fiscal credibility and gilt market volatility.

Technically, the break below 1.8690 confirms resumption of the medium term downtrend from 2.1643 (2025 high). Further decline is now expected toward 61.8% projection of 2.0286 to 1.8690 from 1.9399 at 1.8411. Near-term outlook will remain bearish while 1.8954 resistance holds, in case of recovery.

In the long term picture, the break of 55 W EMA (now at 1.9298) suggests that fall from 2.1643 (2025 high) is reversing whole rise from 1.5925 (2022 low). This decline is also viewed as another falling leg inside the sideway pattern from 2.2382 (2015 high). Sustained break of 61.8% retracement of 1.5925 to 2.1643 at 1.8109 will pave the way towards 1.5925.

Silver briefly pushed above the $89 level this week before losing some momentum ahead of $90 psychologically mark. Yet this pause appears more like consolidation than exhaustion. And, the most important signal in Silver right now is the fact that the rally continueed despite hotter US inflation data and rising expectations for tighter Federal Reserve policy.

Under normal macro conditions, a stronger Dollar and increasing expectations for an eventual Fed “insurance” rate hike would typically weigh heavily on precious metals. Instead, Silver has continued printing higher highs and higher lows while Gold remains comparatively sluggish near support around $4,700.

The divergence inside the precious metals complex suggests that Silver is trading on its industrial scarcity story. The steady compression in the Gold-Silver Ratio suggests investors are favoring Silver’s structural demand profile. Markets are focused on persistent physical deficits in Silver supply, with 2026 projected to mark another year where global demand exceeds production. At the same time, demand tied to AI infrastructure, semiconductors, and high-efficiency solar panels continues providing a powerful underlying tailwind.

More importantly, any meaningful progress toward reopening the Strait of Hormuz could trigger a broader return of global risk appetite, lower oil prices, and a softer Dollar — a combination that would significantly strengthen the industrial demand outlook for Silver while easing macro headwinds from rising Fed expectations. In that case, Silver would likely have the powerful momentum to push through $90, and probably $100 too.

Technically, further rise is expected in Silver as long as 83.01 minor support holds. Next target is 100% projection of 60.97 to 83.04 from 70.83 at 92.90. That level could become a critical test for determining whether the rally from 60.97 is evolving into a larger impulsive breakout rather than merely a corrective rebound.

However, a break below 83.01 would argue that the current rally phase has temporarily run its course and that Silver may need a longer consolidation period above 70.83 before building a stronger base for the next advance.

GBP/USD held at 1.3528 on Thursday following an overnight decline. The pound remains under pressure, close to its lowest levels since late April, amid media reports of a potential leadership contest within the ruling party. According to The Times, British Health Minister Wes Streeting is preparing to launch a campaign against Prime Minister Keir Starmer.

Despite pressure from parts of the government and more than 80 Labour Party MPs, Starmer has reiterated that he does not intend to resign following the party’s weak performance in the local elections. The cabinet composition remains largely stable, despite a few resignations from junior ministers.

External factors continue to weigh on the pound. Talks between the US and Iran remain inconclusive, while restrictions in the Strait of Hormuz keep oil prices elevated. Against this backdrop, the market continues to price in nearly three Bank of England rate hikes by the end of the year.

Investors are also awaiting the release of new UK macroeconomic data, including first-quarter GDP figures.

Technical Analysis

On the H4 chart, GBP/USD is trading within a broad consolidation range above 1.3515, currently extending up to 1.3530. A move lower towards 1.3480 is possible. After this, the pair may consolidate before attempting a move higher towards 1.3650 or a further decline towards 1.3340. The MACD indicator supports this scenario, with its signal line below zero and pointing firmly downwards.

On the H1 chart, GBP/USD is trading within a compact consolidation range around 1.3515, currently extending down to 1.3483. A rebound towards 1.3530 (testing from below) is possible, followed by a potential move lower towards 1.3480. The Stochastic oscillator confirms this scenario, with its signal line below 50 and pointing firmly downwards towards 20.

Conclusion

GBP/USD remains under dual pressure from domestic political uncertainty and global economic risks. Further weakness in the pound is possible if leadership concerns and geopolitical tensions persist, while UK GDP data may act as a short-term catalyst for volatility.