US retail sales rose 0.2% in June, weaker than the +0.5% expected. Year-to-date sales are up 1.5% versus 3% inflation over the same period, so it makes sense that consumer activity is slowing.
Sales excluding cars also rose by 0.2% (+0.4% expected). This indicator shows stagnation even without considering last June’s price correction. This sales dynamic is an essential result of the Fed’s tightening of monetary conditions and the depletion of the stock due to the exertion of stimulus accumulated thanks to the payments during the coronavirus.
Weak retail sales could excuse the Fed from easing monetary policy. But in recent weeks, FOMC members have bombarded the markets with forecasts of two hikes this year and an extended pause.
Simply put, for the market, this means a willingness to cool the economy despite the warning signs. And that’s already a worrying sign for equity indices. It would not be surprising if the latest retail sales data caused equity markets to reassess their optimism about the strength of consumer demand.
The FxPro Analyst Team
- Apple reversed from key resistance level 237.00 - Likely to fall to support level 227.00…
- Aig reversed from support level 76.60 - Likely to rise to resistance level 79.65 Aig recently…
Market Picture The cryptocurrency market remains steady at around $2.31 trillion in market capitalisation, mirroring…
- GBPCAD reversed from resistance zone - Likely to fall to support level 1.7750 GBPCAD…
- USDCHF broke resistance zone - Likely to rise to resistance level 0.8730 USDCHF currency…
The British pound fell below the 1.30 level against the dollar after weak inflation data…
This website uses cookies