Weak data all around: retail sales rise only 0.4%, the control group by only 0.2% and core CPI slips to 1.9% y/y. Upwards revisions do counter the miss on the headline figure but fail to compensate in the control group.
The US dollar is falling across the board. The lower inflation joins similar figures from the Core PCE Price Index which the Fed cares about even more. Retail sales are mixed when looking at the headline and the revisions. However, the control group does not look promising.
Currency reaction
- EUR/USD is edging closer to 1.09. Update: the pair breaks 1.09 and reaches 1.09. Resistance awaits at 1.0950.
- GBP/USD is around 1.2855. Cable is now approaching 1.29.
- USD/JPY is at 113.60. Dollar/yen slips under 113.40.
- USD/CAD trades around 1.3710. The pair quickly slips to 1.3685.
- AUD/USD is flirting with 0.74 once again. Update: 0.7415 is the new level.
April 2017 retail sales and CPI data (updated)
- Retail sales: previous -0.2%, expected +0.6%, actual: 0.4%, with an upwards revision worth 0.3%.
- Core retail sales: prev 0%, exp 0.5%, actual: +0.3% with an upwards revision worth 0.3%
- Retail control group: prev 0.6%, exp 0.4%, actual: +0.2%, with an upwards revision worth only +0.1%.
- CPI m/m: prev –0.3%, exp +0.2%, actual: +0.2%
- Core CPI m/m: prev -0.1%, exp +0.2%, actual: +0.1%
- Core CPI: prev 2%, exp 2%, actual: 1.9%
- CPI y/y: prev 2.4%, exp 2.3%, actual: 2.2%
We still have another important release later today: US consumer confidence, coming at 14:00 GMT. This will be a fresh number for the month of May.
Background
The US released top-tier retail sales and CPI data for the month of April. These critical figures are closely watched for a recovery in Q2 after a very slow Q1.
Markets were tense and somewhat sleepy ahead of the publication. The US has been engulfed by a political storm this week. President Trump fired FBI Director Comey in a controversial decision that could derail his agenda. However, markets shrugged off the event.
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