- US Retail Sales Miss Expectations, Although, Sees Upward Revision
- USD Shoots Higher vs JPY[2] and CHF[3]
US Retail Sales Miss Expectations
DATA RECAP: In what is likely little surprise to many, retail sales fell short of expectations across the board. The headline rate falling 1.1%, larger than the expected 0.3% drop. That said, the figures were not as dire as the BofA card data had suggested, having predicted a 2.3% drop in the headline. Of note, BofA card data has been rather accurate of late. Alongside this, the retail sales data also saw upward revisions to the prior month's figures. Therefore, while this data adds to the narrative of slowing economic activity in the US, this is unlikely to shift the outlook for the FOMC[4], given the major focus on jobs.
Source: DailyFX
How to Trade After a News Release[6]
MARKET REACTION: In reaction to the retail sales report, the USD rose against its major counterparts, particularly against the low yielders (JPY and CHF) as US yields ticked higher. However, while I continue to favour upside in the USD, my view is that this is better expressed against high-beta currencies (AUD[7], NZD[8], CAD[9]) as opposed to safe-havens given the current fragile risk sentiment.
USD, US RATES & GOLD[10] REACTION TO US CPI
Source: Refintiv
US Retailers Earnings Recap
Walmart Q2 earnings: Adj. EPS $1.78, exp. $1.57, revenue $141.05bln, exp. $137.14bln. The retailer had also upgraded its full-year forecast with strong growth stemming from its grocery business and back-to-school sales.
