There was some surprising data from the US yesterday, as December’s retail sales figures showed a drop of 1.2%. It is the biggest drop since September 2009, when the US was just coming out of a recession. The markets had been expecting an increase of 0.2% which should help highlight what a surprise it was.
It could show one of two things in all probability; the recent government shutdown deterred Americans from spending as much as they would ordinarily spend, or the economy is slowing. The next retail sales release will be watched closely, as well as additional economic data in the coming weeks. The dollar had been doing rather well against the euro until the release, but it nosedived shortly after and the euro managed to climb back towards $1.13.
Initial jobless claims increased by 4,000 to 239,000 up to 9 February 2019 from the previous week’s revised level of 235,000. The markets had been expecting a figure of 225,000 so the release was slightly disappointing. However, the aforementioned retail sales was the main talking point in America. Apart from the fact that Congress has approved a shutdown deal and Trump will likely sign it and then declare a national emergency.
It is a fairly busy end to the week for America, with the latest manufacturing and industrial production figures scheduled for release. We will also see the preliminary reading of February’s University of Michigan’s consumer sentiment.
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