Weak US Retail Sales Kick Euro Higher, Equities Down Poor American retail sales for September, -0.3%, expected -0.1% and a soft producer price index raised the specter of a slowing economy and deflation, twin concerns that go to the heart of the Federal Reserve monetary policy. Initial market response to the US news was swift, the euro had climbed over 200 points, the Dow sank 250 points in very volatile action and the US 10-year Treasury was off a astonishing 22 basis points to 1.8622%. All three markets have recovered somewhat is subsequent trading. The Vix volatility index soared to 27.02, its highest in over two years. As troubling as the headline sales numbers were the components. The sales control group a category which mimics the consumption component of the GDP calculation fell 0.2% following Augusts 0.4% gain. Revisions to prior months were negative as well, August was unchanged but July was adjusted down to 0.2% from 0.4%. The Empire State manufacturing index, released at 8:30 am, was disappointing as well, falling to 6.2 from a very strong 27.5; median consensus estimate was 20.3. Joseph Trevisani Chief Market Strategist WorldWideMarkets Charts: Bloomberg
Posted on: Wed, 15 Oct 2014 14:04:57 +0000
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