Forex Signals Brief May 15: Global Growth in Focus – UK GDP and US Retail Sales

A quiet U.S. calendar and trade optimism defined market sentiment Wednesday, while investor attention shifts toward UK GDP and US Retail Sales and PPI inflation readings today. Wednesday brought little in the way of major U.S. economic releases, with only the weekly crude oil inventory report on the docket—an event that typically doesn’t sway markets. Elsewhere, Canadian data showed a -4.1% drop in building permits, nearly undoing the previous month’s 4.5% gain, hinting at a potential slowdown in construction activity. The broader market tone was shaped by continued reaction to diplomatic breakthroughs in the Middle East announced by former President Trump and his administration the day before. Notably, the tech and semiconductor sectors led gains, suggesting investors saw strategic advantage or reduced risk for those industries. Federal Reserve Governor Philip Jefferson reiterated that the current policy rate, which he described as “moderately restrictive,” remains appropriate and adaptable. He emphasized the Fed’s reliance on hard data to guide decisions, particularly as signs of slowing growth emerge. Echoing that tone, Fed Governor Austan Goolsbee underscored the need for patience, noting that lag effects in inflation data make it difficult to interpret April’s hotter-than-expected readings. He cautioned against overreacting to short-term volatility and instead advocated for a longer-term focus. According to Goolsbee, the Fed’s role is not to respond to daily headlines but to anchor economic stability—a view that supports a deliberate and data-driven approach. The US dollar initially dropped more than 1.5 cents during the European session before rebounding during the American trading hours. Equity markets showed mixed results. The S&P 500 continued its upward streak, closing higher for the second consecutive day this year. The Dow Jones Industrial Average slipped by 89.37 points (-0.21%) to 42,051.06, while the NASDAQ surged 136.72 points (+0.72%) to 19,146.81, marking a year-to-date gain of 0.19%. Gold fell sharply by $68 (-2.10%) to $3,181.30, while crude oil edged down $0.76 to $62.91 per barrel. Bitcoin also lost ground, declining $646 to settle at $103,494. Gold remains down nearly 8% from its May 6 peak as risk-off flows have eased, likely in anticipation of further tariff-related agreements. Today’s Market Outlook: May 15, 2025 The next 24 hours will bring a series of closely watched economic releases. In the U.S., attention will be on the second estimate of Q1 GDP, producer price inflation (PPI) for April, monthly retail sales, and weekly unemployment claims. Across the Atlantic, monthly GDP data from both the UK and the Eurozone are also due. Additionally, Fed Chair Jerome Powell is scheduled to speak at the Second Thomas Laubach Research Conference in Washington, D.C. U.S. GDP is expected to show a 0.6% increase for Q1. In contrast, the UK economy likely stalled in March, with consensus calling for 0.0% monthly growth. The Eurozone’s second Q1 GDP estimate is projected to remain steady at 0.4%. Expectations for U.S. retail sales are subdued, with headline growth likely flat at 0.0% after March’s 1.4% jump. Core retail sales are forecasted to rise 0.3%, down from the prior 0.5%. A standout detail in March’s report was a 5.3% surge in auto sales, likely driven by consumers front-loading purchases ahead of anticipated tariffs. Wells Fargo analysts noted, however, that strength extended beyond autos, citing a 1.8% rise in restaurant spending and a 0.4% increase in the control group that feeds directly into GDP estimates. Whether March’s numbers reflect lasting momentum or one-off tariff-related shifts remains to be seen. Early figures for April suggest continued strength in auto sales, indicating any slowdown in consumer demand may be delayed. Retail figures for April are therefore expected to show a modest overall increase, with core categories excluding autos rising 0.3%. Last week, markets were slower than what we’ve seen in recent months, with gold retreating as a result, the EUR/USD falling below 1.11, and stock markets continuing upward. The moves weren’t too big, but we opened 37 trading signals in total, finishing the week with 25 winning signals and 12 losing ones. Gold Falls to the 50 SMA Gold, after peaking at $3,500 in April, has since retreated by $140 and now trades near $3,250. The sharp decline over the past two days—about 1.9%—coincides with renewed investor appetite for risk assets following a new U.S.-UK trade agreement. Nonetheless, some analysts view gold’s recent pullback as a signal of underlying caution despite surface-level optimism. USD/JPY Rejected by the 200 Daily SMA In currency markets, the USD/JPY pair has climbed to 146.00 after breaking through the 140.00 threshold. Despite intermittent pullbacks, the yen remains fundamentally weak. The rally topped out near the 200-day moving average of 148.50 before sellers stepped in. This retracement attracted long positions as buyers sought to regain control. USD/JPY – Weekly Chart Cryptocurrency Update Bitcoin Consolidates Above $100,000 Bitcoin, meanwhile, posted a strong 6% gain, pushing above $103,850 for the first time since February. Enthusiasm around the U.S.-UK trade deal and improved outlook for U.S.-China relations has bolstered crypto sentiment. Bitcoin’s resurgence stands in stark contrast to falling traditional safe-haven assets like gold. BTC /USD – Weekly chart Ethereum Tests MAs after Rebound Following Pectra Upgrade Ethereum has also rebounded significantly after bottoming out at $1,475 in April. The launch of the Pectra update—which enhances wallet and staking features—has driven a nearly 20% rally, lifting ETH above $2,200 and further reinforcing the ongoing crypto recovery. ETH/USD – Weekly Chart