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Solid US data released on Friday and associated USD strength is likely to make it a difficult day in the materials and energy space again.
The release on Friday of China’s smallest increase of total social financing since October saw industrial metals prices fall further, iron ore lost 0.9%. But what has been somewhat overlooked amidst the disappointing Chinese data releases is that there was some very positive news in the US data released on Friday. US retail sales in the GDP control group saw their biggest month-on-month increase since February 2014, while business inventories saw their biggest month-on-month increase since June 2015. The Atlanta Fed’s GDPNow estimate for 2Q has now lifted to 2.8% from a prior 2.2%, and helped the DXY dollar index gain 0.5%.