The control group of retail sales came in stronger than expected at an estimated 0.7% vs 0.4% which gave some pause or the headline figure coming in less than expected at 0.4% vs 0.6% The control group data is what flows through to the quarterly GDP data. Realizing the Atlanta Fed model GDPNow was up to 3.0% for the 4Q from 2.7% previously.
In other data releases in the US session
- Initial jobless claims were higher than expected to 217K vs 210K est. Continuing claims came in below expectations at 1.859M underscoring a still tough employment picture
- The Philly Fed Manufacturing index rose sharply to 44.3 from -10.0 last month and well above the -5 level. The 6-month forward index also increased to 46 from 33 last month as a sign of increased business confidence in the sector.
- NAHB home price data was steady to slightly higher than expected at 47 vs. 45, and business investments came in as expected.
Federal Reserve Governor Christopher Waller, speaking on CNBC, expressed optimism about December's inflation data, calling it “very good.” He said that while 12-month indicators show limited progress on overall inflation, six of the last eight months have been on target, suggesting the trend could continue. go If the data remains favorable, rate cuts could be considered in the first half of the year, with three to four possible cuts depending on the state of the economy.
Waller acknowledged that there could be surprises, like last year, that could delay rate cuts but he remains optimistic about deflation progressing towards the target. He also pointed out that the jobs report was strong due to weaker data earlier, and that although the labor market is strong, it is not too hot. As for tariffs, Waller said they are unlikely to have a significant impact on inflation. He concluded by saying that he may be more optimistic than some of his colleagues at the Fed regarding inflation trends in line with the target.
The debt market was getting more of Waller's dovish comments against the strong economic data (at least today). The 2 year yield is at 4.236%, down -2.8 basis points. The 10 year, which was trading as high at 4.809% earlier in the week, is back down at 4.61% down -4.0 basis points on the day.
US stocks weren't all that motivated with all 3 major indexes closing lower on the day. The Nasdaq was the hardest hit with Apple losing 4% on reports that it lost its top selling spot in China due to a slower adoption of AI in its cell phones.
- The Dow fell to 0.16%.
- S&P fell -0.21%.
- Nasdaq fell -0.89%
European shares moved higher led by France's CAC which rose 2%.
Gold added to its gains with an increase of $18 or 0.68% to $2714. The price is up for the third day in a row after falling – $27 on Monday. Since then the price has increased by $51.
Bitcoin is back below 100K after closing at $100,512 yesterday. The price is trading at $99,959, just under the $100K mark. today stands at 97 319 $.
The USD is closing mixed vs the major currency pairs today. The greenback was the strongest vs the CAD (+0.36%) and the weakest vs the JP)Y (-0.85%). The other changes showed small gains or losses from 0.03% to 0.22%.
- EUR, -0.12%
- JPY, -0.85%
- GBP +0.04%
- CHF -0.24%
- CAD +0.37%
- AUD +0.27%
- NZD +0.16%
