USD: US Retail Sales: Supports The Case For Fed To Not Cut Rates As Early As Market Expects – CIBC

Jun 16,2019 12:30   Source:Forex Crunch

US retail sales have beaten expectations with substantial gains on top of upward revisions. The data may cause second thoughts at the Fed.

CIBC Research discusses its reaction to today’s US retail sales report for the month of May.

US retail sales improved in May following an upwardly revised prior month. The downside miss on headline retailing, which was up 0.5% in May, was minor but a better April reading more than offset that (now +0.3% vs. -0.2% prior). Despite robust unit auto sales in May, the ex-autos figure matched the headline, as did the control group. The positive surprise on the control group, which feeds more directly into GDP, as well as the upwards April revision, left the three-month average annualized pace of sales at a heady 8.5%, a marked acceleration from only 2.9% in Q1. Consumer spending appears to be accelerating in Q2, after a soft start to the year that was hindered by the government shutdown,” CIBC notes.

These data support our forecast that the Fed won’t have to cut interest rates as early as the market is expecting and that has left the USD higher while yields have risen,” CIBC adds.

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The post USD: US Retail Sales: Supports The Case For Fed To Not Cut Rates As Early As Market Expects – CIBC appeared first on Forex Crunch.



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