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Stocks moved lower during the US session and the US dollar moved higher after US retail sales data recorded a massive beat on the month and came in far above expectations today.
A big decline was seen in the EURUSD pair as it traded sub the 1.0700 level, while stocks headed lower on the day due the fact that the Fed could continue to hike rates.
Crypto made the largest move on the day as Bitcoin jumped towards the $23,000 level on the retail sales news as cryptos continue to hold-off last weeks downside pressure.
Retail sales in the US unexpectedly jumped 3% month-over-month in January of 2023, the biggest increase since March of 2021 and way above market forecasts of a 1.8% rise. It follows a 1.1% drop in December.
The biggest rises were seen in sales at department stores (17.5%), food services and drinking places (7.2%), motor vehicles and parts (5.9%), furniture stores (4.4%), electronics and appliances (3.5%), miscellaneous stores (2.8%) and clothing (2.5%).
On the other hand, sales at gasoline stations were flat. Excluding autos, sales increased 2.3% and excluding gas and autos 2.6%. The so-called core retail sales which exclude automobiles, gasoline, building materials and food services and relate more with the consumer spending component of GDP, were up 1.7%.
The data showed that consumer spending remains robust after a slowdown last year, amid a strong labour market, wage growth and signs of easing inflationary pressures. Retail sales are not adjusted for inflation.
Industrial Production in the United States increased 0.8% year-on-year in January of 2023, marking the smallest increase since the pandemic recovery started in March of 2021. Manufacturing expanded a meagre 0.3% and utilities output sank 8.9%. On the other hand, the mining sector increased 8.6%.
