Spending and price data kicks off the US session today. Here's what to expect
US retail sales take the lead in the numbers out at 12.30 GMT
Here's what we're expecting
- 0.2% m/m vs 0.2% in August. Retails were running at 2.2% y/y last month
- Sales ex-autos -0.1% vs +0.1% prior m/m
- Sales ex-autos & gas 0.3% vs 0.3% prior m/m
- Control group 0.3% vs 04% prior m/m
No one is expecting any fireworks here so the risk is if we do see big variations to the numbers. Consumer spending habits are a big part of the Fed rate trade so they are important and any weakness will not be viewed in good light by dollar traders. Even a modest rise in sales may not get the dollar very excited. A big beat and we could see a decent move higher. Flat to soft or very soft and south we go
PPI gives us another look at the price data and that's expected to fall 0.2% this month and 0.8% y/y. Stripping out all the nasty volatile food and energy parts prices are expected to gain 0.1% m/m and 0.8% y/y
I do wish everyone else would follow the UK methodology of printing PPI with both input and output numbers as that gives us a better idea on margins and so a better idea on how prices are affecting business
Anyway, softer data will keep the sentiment that inflation isn't likely to rocket anytime soon and the market generally acknowledges that. That puts the price risk on a decent jump in the PPI numbers
Again, a flat number might bring disappointment to the dollar which is still itching to see data such as this pick up so that the Fed trade can gain some ammo
Retail sales will take the centre stage but big variations in either could set prices moving
