The data was mixed: slightly stronger retail sales for May (due to April revisions), stronger PPI data for May, and a worse than expected NY State Manufacturing Index for June

The headline Retail Sales for May released earlier was -1.3% MoM vs an expectation of –0.7% MoM. additionally , Retail Sales ex-autos was -0.7% MoM vs and expectation of 0.2% MoM. However, as bad because the headline numbers search for May, the April data series was revised much higher, meaning these numbers were slightly stronger than expected. April’s headline print was revised from 0.0% MoM to +0.9% MoM. additionally , the retail sales ex-autos print was revised from -0.8% MoM to 0.0% MoM. Therefore, the May Retail Sales data might not play much a of an element in tomorrow’s FOMC decision.


In addition, US PPI was 0.8% MoM vs an expectation of 0.6% MoM and 0.6% MoM in April. The Core PPI, which strips out volatile food and energy prices, was 0.7% MoM vs and expectation of 0.5% MoM and 0.5% MoM last. Those are strong increases, but the FOMC are going to be watching the YoY data for inflation. which didn’t disappoint! The headline PPI YoY print was 6.6% vs 6.3% expected and 6.2% in April. The core PPI YoY print was 4.8% vs 4.8% expected and 4.1% in April. Therefore, PPI remains running hot. However, some commodity prices, like copper and lumber, are moving lower during the primary half June. Will this cause the FOMC to dismiss May PPI and keep off tapering talk in order that they can have longer to work out if inflation is actually transitory?


We’d be remiss if we didn’t note that the NY State Empire Manufacturing Index for June came out worse at 17.4 vs 23 expected and 23 last. this is often one among our first indications for June that manufacturing could also be slowing. With lack of more June economic data, will this cause the Fed to take care of their current bias and hold off on the tapering talk?


The US Dollar Index (DXY) had been trending higher all night. On the info release, the DXY pulled back 15 pips. Notice that the index is true within the middle of a variety between the five hundred and 61.8% Fibonacci retracement from the highs on May 5th to the lows on May 25th, near 90.50. On May 27th, the DXY broke out of a bearish wedge. The target for the breakout of a wedge may be a 100% retracement, which is near 91.40. Heading into the FOMC tomorrow, price may remain mid-range until after the FOMC announcement.


In summary, the US data today was mixed: slightly stronger retail sales for May (due to April revisions), stronger PPI data for May, and a worse than expected NY State Manufacturing Index for June. If the FOMC was waiting to ascertain this data to undertake and help them choose whether to start out “talking about tapering”, today’s assortment won’t help them!