US data response, retails sales and CPI - Capital Economics
Analysts at Capital Economics broke down the recent key US data where stocks tanked and the dollar and yields rallied, as expected.
Key Quotes:
Consumer Prices (Jan.):
Headline CPI inflation was unchanged at 2.1% in January, but the bigger story was the broad-based 0.3% m/m gain in core consumer prices. In three-month annualised terms, core inflation climbed to a six-year high of 2.9%. Higher inflation is already here and the Fed will be forced to respond soon.
Retail Sales (Jan.):
The weaker tone of the January retail sales report, which showed a stagnation in underlying sales and downward revisions to previous months, suggests that real consumption growth is set to slow in the first quarter. But the strength of the labour market and the boost to incomes from lower taxes suggest that it should pick up again before long.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
