US retail sales breaks the data lull
Our economists expect a modest 0.2% rise in today’s July retail sales print after June’s 0.4% gains, and look for sales excluding gasoline, building materials and autos to have risen by 0.2% as well. Our estimates are a bit weaker than the +0.2%/+0.4% consensus and results in line with our forecast will test the better tone evident in the dollar on Monday. Bigger picture though, the data should remain consistent with retail activity holding up reasonably well heading into Q3, and would be an improvement on the slower pace of core sales reported for June. We look for a gradual improvement in US activity to keep Fed tapering expectations supported and for the policy divergence theme to reassert itself in the weeks ahead to the benefit of the USD. We remain long USDCHF in our trade recommendations portfolio and also maintain a short Cable quant trade.
Read the full report: FX Daily
BNP Paribas