Latest data released by ONS - 18 October 2018
- Prior +0.3%; revised to +0.4%
- Retail sales +3.0% vs +3.6% y/y expected
- Prior +3.3%; revised to +3.4%
- Retail sales (ex autos, fuel) -0.8% vs -0.4% m/m expected
- Prior +0.3%; revised to +0.5%
- Retail sales (ex autos, fuel) +3.2% vs +3.8% y/y expected
- Prior +3.5%; revised to +3.6%
A poor report on the month as retail sales are a tad softer than expected. The pound dips a little but the reaction is rather modest with cable falling from around 1.3115 to 1.3101.
Looking at the details, it's not too surprising as the lift from food sales and good weather from July and August start to fade. According to ONS, the monthly drop in food sales was the biggest since October 2015. The overall details aren't too bad though as we have positive revisions to August data and that makes Q3 retail sales +1.2% q/q and +3.4% y/y - which is the strongest annual calendar quarter growth since Q4 2016.
The release here should keep pound optimism at bay for now but it's not a major release that changes things with Brexit hogging the spotlight. Given the dollar's tepid start to European trading, it's more likely cable will do battle around 1.3100 this session as buyers will be looking to keep price above while sellers are aiming for a daily close below the 100-day MA @ 1.3094.
