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US: Data not helping the sentiment at the moment – Deutsche Bank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 18, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Delhi) – Research Team at Deutsche Bank, suggests that not helping sentiment on Friday too was the US economic data.

    Key Quotes

    “Despite December headline retail sales coming in line with expectations at -0.1% mom there were notable misses for the ex auto (-0.1% mom vs. +0.2% expected), ex auto and gas (0.0% mom vs. +0.4% expected) and control group (-0.3% mom vs. +0.3% expected) components which as a result saw the Atlanta Fed downgrade their Q4 GDP forecast by two tenths to 0.6%.

    As well as that, industrial production last month also fell more than expected (-0.4% mom vs. - 0.2% expected), while the Empire manufacturing print was the biggest downside surprise after tumbling over 13pts to -19.4 (vs. -4.0 expected) – the lowest since March 2009. It was unsurprising then to see manufacturing production also miss (-0.1% mom vs. 0.0% expected) while business inventories in November (-0.2% mom vs. -0.1% expected) were also soft.

    Elsewhere the December PPI reading printed in line at -0.2% mom while the lone beat came in the form of the preliminary University of Michigan consumer sentiment reading which rose 0.7pts to 93.3 (vs. 92.9 expected) with the expectations component in particular up strongly. That being said, one-year inflation expectations did however dip two-tenths to 2.4%.

    Fedspeak on Friday highlighted the obvious concern in markets at the moment but offered little new information on the whole. San Francisco Fed President Williams opined that the main concerns to the US economy are international and that ‘China’s the wild card’, while also noting that it will be an ‘ongoing challenge’ for the Fed to get markets on the same page as policy makers.

    On this topic, NY Fed President Dudley said that ‘projections will adjust as incoming information changes the economic outlook’ and that ‘I would expect convergence over time’. Dudley did however warn that ‘should the economy unexpectedly weaken, then this fall in inflation expectations would become more concerning’.”
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