U.S Retail Sales Disappoint, Inflation Unchanged

U.S Retail sales decreased a seasonally adjusted -0.2% in June from May (revised -0.1%). The market was expecting a +0.1% rise. It’s the first back-to-back sales drop since July and August 2016.
The consumer-price index (CPI) was unchanged in June from May. Excluding the often-volatile categories of food and energy, core-CPI rose +0.1%.

If officials conclude the weakness is broader than a few one-off events, continued subdued readings on core-inflation could put pressure on the Fed’s rate-raise plan.

The Fed has signalled it will raise short-term interest rates once more this year and also begin to reduce the size of its balance sheet.

Fed funds are pricing a +40% chance of a Dec Fed hike.

USD remains under pressure against G10 (€1.1444, £1.2993, ¥112.52, C$1.2692). U.S 10-years -4 bps at +2.31%

Details:

  • US Commerce Jun Retail Sales -0.2%; Consensus +0.1%
  • US Jun Consumer Prices 0.0%; Consensus +0.1%
  • US Jun Retail Sales Ex-Autos -0.2%
  • US Jun CPI Ex-Food & Energy +0.1%; Consensus +0.2%
  • US Jun Retail Sales, Ex-Autos & Ex-Gas -0.1 %
  • US Jun Consumer Prices Increase 1.6% From Year Earlier; Core CPI Up 1.7% Over Year
  • US May Retail Sales Revised to -0.1%
  • US Jun CPI Energy Prices -1.6%; Food Prices 0.0%
  • US May Retail Sales and Ex-Autos Unrevised at -0.3%
  • US Real Average Weekly Earnings +0.5% In Jun
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    Dean Popplewell

    Dean Popplewell

    Vice-President of Market Analysis at MarketPulse
    Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
    Dean Popplewell