* US retail sales drive modest paring of Fed QE trades
* Singapore (new report): we expect the pace of SGD appreciation to slow
* Empire Fed to give a first look at August US data
What to watch for today
USD: A glimpse at August. The first data for August will arrive today with the release of the Empire Fed manufacturing survey. Consensus is looking for a stable Empire reading after July’s big bounce. Meanwhile, we expect another solid monthly gain in industrial production for July, in part due to record hot temperatures. Overall, the data are likely to be supportive for further recovery in risk sentiment. At the same time, as we saw in the aftermath of Tuesday’s strong retail sales report, the flip side of the better numbers will be rising ambiguity about prospects for a new QE program in September. July CPI numbers are also released, and we agree with consensus that the index will continue to rise at a subdued 0.2%mom pace, which would see the yoy rate fall to its lowest level of the year.
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