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14 Apr 2015
US retail sales might come out above consensus – ING
FXStreet (Barcelona) - Rob Carnell, Chief International Economist at ING, expects US retail sales to register an above consensus rebound and firm expectations for a June rate hike by the Fed.
Key Quotes
“Forecasters are looking for a 1.0% MoM increase in headline US retail sales for March due out later today. That sounds reasonable, but if that is all we get, then we suspect it may not be enough to help breathe life into the sickly June rate hike scenario, resulting in a level of retail sales considerably lower than that prevailing in November last year, before a succession of apparently one-off and external shocks took sales lower for three consecutive months.”
“As a result, we think there is a chance we see some better data than the consensus is looking for, which could see June rate hike expectations firm.”
“In the first place, auto sales rose by more than 3.0% MoM in March, taking sales close to pre-soft-patch levels, and indicating a decent degree of pent-up demand. Headline sales should be lifted by about 0.5ppt thanks to this alone.”
“Secondly, gasoline prices have been steady in March, but have averaged more than in January and February. This should provide a further lift to headline sales.”
“Thirdly, weekly retail surveys have been firming since February, and are consistent with a stronger YoY rate of growth than implied by the consensus forecast. This should bode well for the core sales measures, where the consensus is for a mediocre 0.5ppt increase.”
“Fourthly, consumer sentiment is running ahead of retail sales despite its recent dip, and implies a convergence in the data, perhaps from stronger retail sales rather than even weaker sentiment.”
“If we do get a stronger-than-expected retail sales number, then this should lift US Treasury yields back above 2.0% and push the EUR/USD cross beyond recent lows.”
Key Quotes
“Forecasters are looking for a 1.0% MoM increase in headline US retail sales for March due out later today. That sounds reasonable, but if that is all we get, then we suspect it may not be enough to help breathe life into the sickly June rate hike scenario, resulting in a level of retail sales considerably lower than that prevailing in November last year, before a succession of apparently one-off and external shocks took sales lower for three consecutive months.”
“As a result, we think there is a chance we see some better data than the consensus is looking for, which could see June rate hike expectations firm.”
“In the first place, auto sales rose by more than 3.0% MoM in March, taking sales close to pre-soft-patch levels, and indicating a decent degree of pent-up demand. Headline sales should be lifted by about 0.5ppt thanks to this alone.”
“Secondly, gasoline prices have been steady in March, but have averaged more than in January and February. This should provide a further lift to headline sales.”
“Thirdly, weekly retail surveys have been firming since February, and are consistent with a stronger YoY rate of growth than implied by the consensus forecast. This should bode well for the core sales measures, where the consensus is for a mediocre 0.5ppt increase.”
“Fourthly, consumer sentiment is running ahead of retail sales despite its recent dip, and implies a convergence in the data, perhaps from stronger retail sales rather than even weaker sentiment.”
“If we do get a stronger-than-expected retail sales number, then this should lift US Treasury yields back above 2.0% and push the EUR/USD cross beyond recent lows.”