US open: Stocks rise as consumer spending continues

US futures

Dow futures +1.15 % at 32611

S&P futures +1.44% at 4066

Nasdaq futures +1.7% at 12459

In Europe

FTSE +1% at 7528

Dax +1.63% at 14173

Euro Stoxx  +1.5% at 3739

After a mixed close in the previous session, US stocks are set to open higher on Tuesday as risk sentiment improves and retail sales beat forecasts.

Retail sales rump 0.9% MoM in April, as consumers brushed off rising prices and weak consumer confidence. This was above the 0.7% forecast but down slightly from the upwardly revised 1.4% sales growth recorded in March. Given the importance of the consumer in the US economy, making up for around two-thirds of economic output, the upbeat numbers are a relief to the market, which has been fretting over surging prices and an aggressive Federal Reserve.

The data was an improvement on the NY manufacturing data released yesterday, which saw a steep decline and fueled fears over the health of the US economy.

Looking ahead, attention will turn to a speech by Federal Reserve chair Jerome Powell, where the markets will be listening closely for any clues on the chances of a jumbo 75 bp rate hike.

In corporate news:

Twitter is back under the spotlight, although it never really went away after Elon Musk demanded proof that fake accounts make up less than 5% of its total users, hours after he suggested he could be looking for a lower price.

Where next for the Nasdaq?

The Nasdaq rebounded off 11950, the May low, recapturing the 50 SMA on the 4-hour chart, which, combined with the bullish RSI, keeps buyers hopeful of further upside. Buyers will be looking for a move over the 12800/900 resistance zone to expose the 200 sma at 13575 and the May high. On the flip side, should the 50 sma not hold support, a move below 11710 is needed to create a lower low.

FX markets USD extends selloff, GBP rallies.

USD is falling, extending the selloff from the previous session as risk sentiment improves and despite treasury yields rising. Attention now shifts to Powell, who is due to speak later today.

GBP/USD is surging higher after upbeat UK jobs data. Unemployment unexpectedly fell to 3.7% an almost 50- year high. Vacancies also rose, with more jobs available than people unemployed, marking a first since records began. Regular wages rose 4.2%, but this is a wage reduction in real terms. However, wages, including bonuses, jumped 7%...

EUR/USD is capitalizing on the weaker USD after GDO data showed that the economy grew more than expected in Q1 at 0.3% QoQ, above the 0.2% preliminary read. However, that is likely to be as good as it gets amid the fallout from the Russian war.

GBP/USD  +1.33% at 1.2490

EUR/USD  +1% at 1.0546

Oil rises to a 7-week high

Oil prices have jumped higher on Tuesday, hitting a 7-week high, boosted by the EU’s efforts to push through its ban on Russian oil imports, which would tighten supply in an already tight market.

Hungary has been digging its heels in and refusing to approve the proposal. However, expectations are still for the deal to be pushed through in the coming weeks. This would be a pivotal moment for the oil market, mainly is it comes at a time when COVID cases are easing, and lockdown restrictions are relaxing. That would be a double whammy of an improving demand outlook combined with tighter supply which could send oil prices back above $120.

API data is due later today.

WTI crude trades +1.04% at $113.78

Brent trades +1.3% at $114.74

Looking ahead

18:00 ECB Lagarde speech

19:00 Fed Chair Powell’s speech