Top-tier US data is released on Good Friday, a holiday in most of the world. The data came out below expectations, but the dollar is only reacting in the most obvious place: USD/JPY. Dollar/yen often best reflects American indicators. Will other currency pairs react later on?
US CPI dropped 0.3% month over month, worse than 0% expected. Core CPI is also down 0.1% against an increase of 0.2% predicted. On a yearly basis, CPI is up 2.4% instead of 2.6% expected. Core inflation is at the magic 2% level, but also here, it is below the 2.3% level predicted.
Retail sales are down 0.2% instead of +0.1% and core sales are flat, falling short of 0.2% projected. Downward revisions worth 0.2% exacerbate the falls in retail sales numbers for March.
The control group surprised with a rise of 0.5% instead of 0.3% predicted, yet also, in this case, a downward revision worth 0.3% erases the surprise.
It seems there is no correlation between elevated consumer confidence and actual spending. The gap between the soft data and the hard data widens.
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Here is how the move looks on Dollar/yen. Note that the pair reached 108.61, the lowest level since November 2016.
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