Previewing US Retail Sales Ahead

Nov 15, 5:51 pm
Retail sales US

The first trading day of the week came in with no significant economic releases from the US, and market volatility remained on the upside with Trump's victory as the main driver. However, during the upcoming US session today, there are many economic figures to be released from the US, which is set to have a notable impact on the markets. In this article, we will look mostly at US Retail Sales. We will also discuss recommended trades for the news.

Definition

Retail Sales: Change in the total value of sales at the retail level. This is the earliest and broadest look at vital consumer spending data.

Core Retail Sales: Change in the total value of sales at the retail level, excluding automobiles. Automobile sales account for about 20% of Retail Sales, but they tend to be very volatile and distort the underlying trend. The Core data is therefore thought to be a better gauge of spending trends.

Empire State Manuf. Index: This index measures the level of a diffusion index based on surveyed manufacturers in New York state. A figure above 0.0 indicates improving conditions while a figure below that level indicates worsening conditions.

Import Prices Change in the price of imported goods and services purchased domestically. It is released monthly, about 13 days after the month ends. This is the earliest government released inflation data.

Why Is This Important?

  • Retail Sales: It is the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
  • Empire State Manuf. Index: It is a leading indicator of economic health - businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment.
  • Import Prices: It contributes to inflation for businesses and consumers, especially those who rely heavily on imported goods and services.

Expectations

Indicator

Forecast

Prior

Core Retail Sales

0.5%

0.5%

Retail Sales

0.6%

0.6%

Empire State Manuf. Index

-1.5

-6.8

Import Prices

0.4%

0.1%

The estimates are mixed, but we can still say that it looks encouraging. Both Retail and Core Retail Sales are expected to have risen notably last month. However, the Empire State may ease its shrinking to just -1.5. Yet,  US economic releases have been volatile for the past few months. Therefore, always keep a high margin of error in today’s data.

What Matters The Most?

In today’s data, traders need to keep an eye on  Core Retail Sales. This is much more important that  MoM Retail Sales, as energy products are excluded because they are considered the most volatile products. Therefore, the Core Retail Sales data shows the real growth of retail sales.

Positive or Negative?

Generally speaking, a positive number should be positive for the US Dollar and vice versa. However, since there is more than one economic release due today, traders need to focus on Core Retail Sales.

A positive Core Retail Sales figure with weaker Retail Sales would be considered a positive indicator for the US Dollar. However, a weaker Core Retail Sales would have the biggest impact, even if Retail Sales comes in with a notable rise.

Levels To Watch

Symbol

S3

S2S1PivotR1R2

R3

EURUSD

1.0532

1.06191.06781.07651.08241.0911

1.0970

USDJPY

105.05

105.78107.10107.83109.15109.88

111.20

GBPUSD

1.2237

1.23381.24121.25131.25871.2688

1.2762

USDCHF

0.9764

0.98160.98980.99501.00321.0084

1.0166

USDCAD

1.3400

1.34451.35001.35451.36001.3645

1.3700

 
Nour Eldeen Al-Hammoury

Nour Eldeen Al-Hammoury has more than ten years of experience in focusing on foreign exchange and global economic developments, as well as central bank policies and intermarket analysis (global markets relationships). Nour Eldeen is a regular on many major TV networks (several times each) such as: BBC Radio, BBC World News, Al-Jazeera, Al-Hurra TV CNBC Europe, CNBC Asia, CNBC Arabia, Al Arabiya, Bloomberg, Russia Today, Dubai TV, Sama Dubai, Skynews Arabia, Qatar TV and Future TV News.