ForexLive Americas FX news wrap: Never underestimate the US consumer

• Gold down $27 to $1768
• US 10-year yields up 5.1 bps to 1.57%
• WTI crude oil up 94-cents to $82.25
• S&P 500 up 32 points to 4470
• NZD leads, JPY lags

The US retail sales report was a strong surprise but the market reaction was minimal. Later, flows appeared into the London fix with a distinct element of USD selling. That knocked USD/JPY down to 114.00 from 114.42 and hit the dollar elsewhere as well. It later recovered most of the gains.

At the same time, you’d be surprised that dollar wasn’t stronger if you were looking at bonds, particularly the front end. Yesterday’s fat finger in twos still had people talking and some were certainly wishing they’d sold more into it as rates moved up 4 bps to touch 0.40% for the first time since the pandemic. Yields rose all the way out the curve, particularly in 5s which are pricing in a rate hike cycle.

EUR/USD was chopping as it ranged between 1.1590 and 1.1610, tapping each edge three times and then finishing the day nearly flat.

Cable was much more lively as it rose to 1.3745, gaining nearly three-quarters of a cent on the day.

The real action continues to be in yen crosses as they added another strong day with GBP/JPY above the January 2018 high in yet another breakout. Yen crosses — including CHF/JPY all gained at least 0.5%.