- US May advance retail sales +0.1% vs +0.3% expected
- Fed's Musalem: Confidence to cut rates could take months and likely quarters to play out
- Fed's Goolsbee: Latest inflation number was 'excellent' hopefully more to come
- Fed's Kugler: Policy has more work to do, judgement will be guided by data
- Fed's Kugler: We have two-sided risks, we continue to pay attention to data
- NY Fed Pres. Williams: Rate cut path depends on data
- Fed's Logan: Will need to see 'several more months' of better CPI numbers
- Fed's Barkin: We are clearly on the back side of inflation
- Nvidia is now the world's most-valuable company
- US treasury auctions off 20 year bonds at a high-yield of 4.452%
- ECBs Villeroy: We owe our citizens respect. That means not running big deficit
- Atlanta Fed GDPNow for 2Q growth 3.1% unchanged from the last estimate.
- US CBO boosts fiscal 2024 deficit forecast by $408 billion
- New Zealand GDT price index -0.5%
- US April business inventories +0.3% vs +0.3% expected
- US May industrial production +0.9% vs +0.3% expected
Markets:
- Gold up $10 to $2329
- WTI crude oil up $1.21 to $81.54
- US 10-year yields down 6.2 bps to 4.22%
- AUD and CHF lead, JPY lags
- S&P 500 up 0.25%
The US retail sales report was soft on the headline, in part due to clothing, furniture, building materials and gasoline. The control group matched estimates but the prior was revised two ticks lower and the overall market take on the report was that it was soft and the US dollar slackened. The Fed comments were mostly ignored, though I sensed a slightly-hawkish bent and unwillingness to tee up hikes. The dollar selling accelerated later on a very strong 20-year auction.
It was generally a straight-line move but there was a big exception into the London fix as the dollar was bid particularly strongly against the euro and pound, perhaps owing to the US holiday on Wednesday. In any case, those moves slowly unwound over the course of the day, with the exception of some lingering euro weakness.
Ultimately, the pound and euro finished flat on the day while European safe haven flows continued to drive bids into the franc. The Australian dollar benefited from the comments after the RBA meeting and finished at the highs of the day as US equities made fresh records.
