Allan von Mehren
Danske Bank A/S
US retail sales were slightly softer than expected in July, showing some moderation in growth following the strong rebound in Q2. This is much in line with our expectation that the US economy will see some moderation in growth in H2 from the 4% pace in Q2 to 3-3.5% in H2.
The retail sales control group rose 0.1% m/m (consensus: 0.4% m/m) and was revised a bit lower for June to 0.5% m/m from 0.6% m/m. After some swings in retail sales related to the weak winter sales and the rebound in Q2, sales are reverting to the trend seen in past years.
The deceleration in growth also suggests that we should expect a moderation in ISM indices for both manufacturing and non-manufacturing over the coming three-four months. This may ease the pressure a little bit on the Fed. However, we do believe that job growth will continue to be robust and unemployment will move lower, which we believe will lead to a first hike in April next year, six months after the end of tapering.
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.
Recommended Content
Editors’ Picks
EUR/USD remains on the defensive near 1.0680 on Dollar strength
The solid performance of the Greenback keeps the price action in the risk-associated universe depressed so far on turnaround Tuesday, sending EUR/USD to multi-day lows in the 1.0680 region.
GBP/USD declines toward 1.2500 on renewed USD strength
GBP/USD turned south and dropped toward 1.2500 in the second half of the day. The US Dollar stays resilient against its rivals following the strong wage inflation data and doesn't allow the pair to gain traction.
Gold stable below $2,300 despite mounting fears
Gold stays under selling pressure and confronts the $2,300 region on Tuesday against the backdrop of the resumption of the bullish trend in the Greenback and the decent bounce in US yields prior to the interest rate decision by the Fed on Wednesday.
XRP hovers above $0.51 as Ripple motion to strike new expert materials receives SEC response
Ripple (XRP) trades broadly sideways on Tuesday after closing above $0.51 on Monday as the payment firm’s legal battle against the US Securities and Exchange Commission (SEC) persists.
Eurozone inflation stable as the outlook on prices gets increasingly muddied
Eurozone headline inflation remains stable at 2.4%. With higher energy prices and improving domestic demand, questions about the direction of inflation become louder.