US Retail Sales Rise 0.7% Topping Estimates

retail sales upside surprise across the board here 0.7% against an estimate of 0.4 you can strip out autos you can strip out gas the numbers look like this positive 1% the survey positive 0.4 if you look at the control group that number of course goes into GDP that is an upside surprise as well at 1% the estimate there 0.5 so it's an upside surprise across the board here for us retail sales in the bond market guess what is happening yields are up here by seven basis points on a 10 year to 426 getting very close to a cycle high for a 10-year yield in the equity market breaking down towards session lows we're down by 0.7% elisa that's an upside surprise again at a time when people were expecting there to be a little bit of bite with people not necessarily having the savings we're looking right now i'm just watching that two-year yield climb past five percent we're now gaming out a five percent yield for two years and the length of that is really what's catching my attention over there in the currency space well that euro strength fades and we can see a 109 uh one 108 nine we actually broke out of the 109 version as dollar really does become ascendant if you bring up an intraday chart of the euro on your screen at home just take a look it's literally just like that down bank the euro negative on the session now it was positive a break of 109 briefly but that's upside surprise again for us retail sales and that goes in this is the last big data point before jackson hole next week elisa the consumer based on retail sales i know we can break down what's happening beneath the surface still looking pretty resilient inflation some people still arguing is bottoming here and may well pick up through the year and this bond market is not smelling the end of a rate hiking cycle of the two years back through five is it no and if it is seeing the end of the actual hiking cycle it's seeing the uh simply it's the constancy of a rate that's held at that level not necessarily rate cuts it's not just the upside surprise it's the nature of the upside surprise the control group which you pointed to john which does go into gdp came in at one percent month over month versus the estimate of 0.5 percent up from 0.5 percent the prior month which was revised lower by a tenth of a percent this is a massive upside surprise especially on month over month at a time when consumers were supposed to be running out of gas in their tank so let me go through this again if you are just tuning in upside surprise 0.7 headline retail sales for the month of july that's month over month the number we were looking for in the survey 0.4 strip out autos and gas that number is one percent against an estimate of 0.4 and the control group the so-called control group that's the number that goes into gdp one percent against an estimate of 0.5