(02 APRIL 2019)DAILY MARKET BRIEF 1:Weak US data continues to flow

(02 APRIL 2019)DAILY MARKET BRIEF 1:Weak US data continues to flow

2 April 2019, 14:19
Jiming Huang

The week started off on a bad foot in the US, at least from an economic standpoint. February retails came in well below estimate and heightened concerns about a severe economic slowdown. The last batch of economic data was no pretty; however, the upside revisions in January’s stats soften the impact. Advanced retail sales contracted 0.4%m/m in February, while economists were expecting an increase of 0.2%. Previous month’s reading was revised to +0.7% from +0.2%. The core measure that excluded auto sales contracted 0.4%m/m versus an expected increase of 0.33%; January’s print was lifted to +1.4%m/m from 0.9% initially estimated.

Overall, the upward revisions roughly offset the disastrous readings of February. Consequently, the FX didn’t reacted much to the publication as investors’ attention was focused on Brexit talks in the House of Commons. On a more positive note, ISM manufacturing climbed to 55.3 in March compared to 54.2 in February and 54.5 estimated.

Despite upward revisions in all of retail sales measures, consumers’ confidence has been severely damage over the last few months, thanks to a market sell-off, trade tensions between China and the US and a government shutdown. The good news is that the effects of those events won’t last. However, one worrying aspect remains, the economic boost provided by Trump tax cut and increased spending is ending. Will more liquidity from the Federal Reserve be the solution?

By Arnaud Masset

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