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The US dollar currency is edging lower after the US retail report came in better than expected, however, some negative revisions were seen to the previous months reading.
So far, the implied odds of a 100 bps Fed hike are down to 21% from 35% yesterday, indicating that the market is once again repricing the risk of more aggressive rate action on this latest number.
Digging into the report a revised 0.4% fall in the previous month, which was worse than flat reading expected. Falling gasoline prices allowed consumers to buy other items, with spending rising for motor vehicles.
Elsewhere, food services and drinking places, building materials and garden equipment, sporting goods, hobby, musical instruments and books, general merchandise stores, food and beverages, and clothes all increased by or nearly 0.5%
On the other hand, sales at gasoline stations were down 4.2%, and excluding gasoline stations, sales rose 0.8%. Core retail sales which exclude automobiles, gasoline, building materials and food services, were unchanged.
Another contributing factor to the move in the greenback is Initial jobless claims. Initial jobless claims come in stronger than expected at 213,000 against 226,000 estimated.
Also, the prior Initial jobless claims weeks number of 222,000 was also revised to 218,000. Making the 4-week moving average 224,000 vs. 232,000 revised.
Continuing claims came in at 1.403 million vs. 1.475 million estimates. The prior week was revised down to 1.401 million from 1.473 million previously reported. The 4-week moving average 1.413 million vs 1.421 million last week.
On the flipside, US Industrial production came in at -0.2%, while the prior was +0.6% which was revised to +0.5%. Sorry worry as this is the worst reading since late 2021.
Other highlights inside the report showed that Capacity utilization 80.0% vs 80.3% expected and Manufacturing output +0.1% vs 0.0% expected. The prior output reading came in at +0.7%.
