USD ticks up following Retail Sales and PPI

EURUSD, Daily            

U.S. retail sales rose 0.6% in December with the ex-auto component up 0.2%. November’s 0.1% headline gain was nudged up to 0.2%, while the ex-auto figure posted a 0.3% gain from 0.2% originally. Overall sales are up 4.1% y/y. Sales excluding autos, gas, and building materials flat versus 0.3% previously (revised from 0.2%). Vehicles and parts surged 2.4%, rebounding from the prior 0.2% dip (revised up from -0.5%). Gas station sales increased 2.0% from unchanged (revised from 0/3%). Also adding to the strength in the headline were a 1.3% increase in non-store retailers, along with 0.5% gains in furniture and electronics, with healthcare up 0.3%. Miscellaneous sales declined 1.0%, eating, drinking sales fell 0.8%, while food, beverage sales were off 0.3%. General merchandise sales slid 0.5%, which included a 0.6% drop for department stores, a trend that was seen most of the holiday season.

U.S. PPI rose 0.3% in December with the ex-food and energy index up 0.2%. There were no revisions to November where overall producer prices increased 0.4% with the core up 0.4%. Goods prices were up 0.7% from 0.2%, with food up 0.7% and energy jumping 2.6%. PPI growth accelerated to a 1.6% y/y pace in December from the 1.3% growth rate in November. The ex-food and energy index grew at a 1.6% y/y rate in December, matching November.

The USD was a bit choppy, though ended up marginally higher after the mix of data, where retail sales were strong, though a touch under expectations, and PPI was in-line with forecasts. EURUSD rallied to 1.0675 from 1.0655 before falling to N.Y. session lows of 1.0620, as USDJPY initially fell to 114.15 from 114.35, and then rallied to 114.95.  Cable fell to 1.2135 before recovering the 1.2150 handle.