US retail sales broke its run of six consecutive positive prints in October, dropping 0.1% in the month of October compared to September. In addition, September’s number was revised higher from +0.7% to +0.9%.
Retail sales has contributed to the strength of the US economy as US consumers played a large part in the massive outperformance in US GDP for Q3. However softening labour data (NFP, average weekly earnings) and yesterday’s lower CPI print set the tone ahead of retail sales.
Markets appear to be reacting to the actual print vs the consensus which has seen the dollar and the 2-year treasury yield rise despite retail sales contracting month on month. Markets will be looking ahead to the Santa rally as we head towards the Christmas period.
