USDJPY Rallies Above 110.20 Following Upward Revisions to Retail Sales

Talking Points:

Most Advance Retail prints rose by 0.3% in April including headline and core; both saw upward revisions in March

– USDJPY rips above 110.20 as inflation shows signs of life

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Retail Sales: Little Change in April, Upward Revisions in March

The Census Bureau reported this morning that their advance estimate of US April Retail Sales along with revisions to the March prints. Headline retail sales came in at 0.3% last month amounting to $494.6 billion. This was in line with market expectations. Core retail sales which strips auto and gas prices from the calculation, came in at 0.3% but that missed market expectations which were at 0.5%. The real highlight of this month’s report was the upward revision to the March retail sales prints. Headline sales were revised upward from 0.6% to 0.8%. Similarly, core retail sales saw an upward revision of 0.2% to 0.4%. Total sales for the February through Aril 2018 period were up 4.6% from the same period one year ago.

This report only reflects the Bureau’s advance estimate. The next report is scheduled for release on June 14, 2018 to report May retail sales figures.

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The U.S. Census Bureau conducts the Advance Monthly Retail Trade and Food Services Survey to providean early estimate of monthly sales. These sales are categorized by the kind of business for retail and food services. Questionnaires are mailed to a sample of approximately 4,700 employerfirms. From these responses, the Census Bureau, computes the advance sales estimate.

You read more about the Census Bureau’s methodology in the Advance Sales report.

Below is a list of economic releases that has pushed the dollar higher:

USD Retail Sales Advance (MoM) (APR): 0.3% as expected, from 0.8% (revised up from 0.6% previous)

USD Retail Sales Ex Auto (MoM) (APR): 0.3% versus 0.5% expected, from 0.4% (revised up from 0.2% previous)

USD Retail Sales Ex Auto and Gas (APR): 0.3% versus 0.4% expected, from 0.4% (revised up from 0.3% previous)

Chart 1: USDJPY 15-minute Chart (May 10 – 15, 2018)

Dollar strength has gotten extra fuel from today’s retail sales data. USDJPY rallied above 110.20 following the release of the data. Traders are likely making bullish bets on inflation despite a relatively cooled CPI print last week.

— Written by Dylan Jusino, DailyFX Research

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