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11 Dec 2015
US retail sales: Last data hurdle in the path of Fed lift-off – Rabobank
FXStreet (Delhi) - Michael Every, Research Analyst at Rabobank, suggests that one of the final few data hurdles we have to face before that Fed rate decision will fall today in the form of retail sales for November.
Key Quotes
“The expectation is 0.4% m-o-m headline and 0.3% ex-autos, but the risks must be of a significant surprise to the downside given the slew of survey data suggesting that credit card spending was weak during the period. Given that headline spending was only up 1.7% y-o-y in October, if we do see a drop in m-o-m spending, potentially the y-o-y pace of sales could go all the way back to as low as 1.1%, which is where it stood in the first half of 2008, for example. Of course, within that mix there may still be some serious ’bling’ being shifted for those whose share portfolios have soared so far in Q4.”
“We also see US PPI, where inflation will again be nowhere in sight (consensus: 0.0% m-o-m, -1.4% y-o-y in terms of final demand), and business inventories (consensus: 0.1% m-o-m), ahead of December Michigan consumer confidence, expected to edge up to a nice, warm egg-noggy 92.0.”
“We will also get inflation expectations from the same survey: last month saw a 1 tick bounce in 5-10 year CPI expectations to 2.6%, which was only the second lowest since the series began in 1986 rather the joint lowest at 2.5%.”
Key Quotes
“The expectation is 0.4% m-o-m headline and 0.3% ex-autos, but the risks must be of a significant surprise to the downside given the slew of survey data suggesting that credit card spending was weak during the period. Given that headline spending was only up 1.7% y-o-y in October, if we do see a drop in m-o-m spending, potentially the y-o-y pace of sales could go all the way back to as low as 1.1%, which is where it stood in the first half of 2008, for example. Of course, within that mix there may still be some serious ’bling’ being shifted for those whose share portfolios have soared so far in Q4.”
“We also see US PPI, where inflation will again be nowhere in sight (consensus: 0.0% m-o-m, -1.4% y-o-y in terms of final demand), and business inventories (consensus: 0.1% m-o-m), ahead of December Michigan consumer confidence, expected to edge up to a nice, warm egg-noggy 92.0.”
“We will also get inflation expectations from the same survey: last month saw a 1 tick bounce in 5-10 year CPI expectations to 2.6%, which was only the second lowest since the series began in 1986 rather the joint lowest at 2.5%.”