Will Retail Sales Add To The USD Bullish Trade? - BNPP

The US data calendar has been quiet following the January employment report but picks up again Thursday with the release of January retail sales, notes BNP Paribas.

"Headline sales will likely fall for the second month in a row, but largely because of the effects of falling gasoline prices. Control group sales, on the other hand, are likely to rebound after last month’s surprising decline as consumers redeploy spending on gasoline to other consumer goods," BNPP projects.

"Our +0.5% estimate is above consensus and should provide support for the USD. We also expect weekly initial claims to hold near last week’s very low levels," BNPP adds. 

In line with this view, BNPP maintains a long USD exposure in its model portfolio by staying short EURUSD, and long USDJPY in cash.