US retail sales rose by only 0.2% in August. They were expected to rise by 0.5% in August after advancing by 0.2% in July (before revisions). Core sales rose by only 0.1%. They saw expectations of +0.2% after half the gain in July. PPI rose by 0.3% and exceeded expectations to rise by 0.2%.Core PPI remained flat, below expectations for a rise of 0.2%. All in all, a disappointing outcome.
EUR/USD was trading just under 1.33 before the release and now trades above this figure. USD/JPY traded above 99.50 and it is now below this line. GBP/USD traded on high ground at 1.5840 and now advances. updates coming —
The decision on tapering bond buys is only 5 days away. There is a growing notion that the Fed will taper in an amount of 10-15 billion, and the emphasis begins to move to the statement regarding the next moves.
The recent weak NFP took some of the steam out of the tapering train, but it is hard to see the Fed do anything else at this point.
There is still one more important event today: the release of US consumer confidence by the University of Michigan.