U.S Retails 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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