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US retail sales fell by 16.4%, double the worst on record. Escalating Sino-American tensions and the Fed’s refusal to set negative rates are other downers, FXStreet’s analyst Yohay Elam reports.

Key quotes

“US Retail Sales were projected to fall by 12% in April after sliding by 8.3% in March, but the outcome was -16.4%. Moreover, the closely watched Control Group – which is critical to growth calculations – plunged by 15.3%. That is triple the estimate.”

“For stock markets, the collapse in retail sales joins two other downers: First, Sino-American relations have continued deteriorating. President Donald Trump raised a trial balloon of ‘cutting ties’ with China. A drop in global trade is detrimental to the economy. The second is the refusal of the central bank to set negative interest rates. Jerome Powell, Chairman of the Federal Reserve, said the bank is ‘not looking’ at this option.”