US Retail Sales for March printed much worse than forecast at -1.1% versus expectations of 0.3% gain. Less autos the number also printed weaker at -0.9% versus 0.0% projected. The news was a blow to recovery bulls who had argued that US consumer demand was stabilizing as the US economy was in the process of carving out a bottom.

A relatively quiet night of trade in the currency markets punctuated by some profit taking in high beta currencies after the euro, the pound and the Aussie all rallied strongly yesterday as risk appetite continued to dominate trade. Today the mood has been t more somber with US equity futures pointing to a lower open despite the fact that Goldman Sachs reported better than expected results yesterday after the close of US equity session.

Demand for risk continued unabated at the start of the week’s trade today with USD/JPY taking out the 101.00 figure in morning European session as Asian and European equity markets remained firmly in the green. Investors ignored the geo-political; threats from the North Korean rocket launch that fizzled into the Pacific focused instead on the growing theme of stabilization in the global economy.

Buoyant equity markets reignited risk appetite in currencies tonight as both Asia and Europe extended the gains made yesterday in DJIA on the back of better than expected ISM Manufacturing numbers. The iSM report showed a small measure of improvement across most of its components fueling a rally in stocks on the belief that US demand may have finally stabilized.

The start of the week revived the carry trade in the currency market with Aussie hitting the 70 cent mark for the first time since January 10th of this year as equity markets in Asia and Europe opened on a positive note. The stealth rally in commodities which saw oil prices hit $52/bbl in overnight trade while gold rose to $957/oz also helped contribute to AUD/USD strength.