The main economic releases of the day have come in a little disappointing from the US with both CPI and retail sales missing estimates. The CPI reading showed a rise of 0.2% M/M which whilst being an improvement on the previous (-0.3%) was still slightly below estimates of a 0.3% rise.
On a year-on-year basis the core reading has dipped back below the 2% level which is seen as a target threshold for the Fed. With the core level back below 2% the pressure on the Fed to raise rates may ease somewhat and the market reaction seems to suggest this.
. As well as the CPI data US retail sales were also below forecast. As you can see form the chart below both the headline and core readings have been steadily improving since the start of last year but today’s release threatens this trend higher.
The USDJPY (-0.37%) has fallen to its lowest level of the day following the release whilst Gold (+0.53%) saw a spike higher. Stock futures reacted positively to the news with the US500 (-0.06%) recouping some of its earlier losses and moving back to unchanged on the day