USD, JPY flows: USD firm after better than expected retail sales
December retail sales came in slightly above expectations, supporting the USD strength seen this week
US retail sales come in slightly stronger than expected, triggering some modest USD gains across the board, as US yields climb further. The data, with minor revisions to November, represent another strong quarter in Q4 with 1% q/q growth, and to some extent help justify the rise in yields see so far this week.
Even so, USD gains are now looking a little stretched, particularly against the JPY as we approach the 148 resistance level. But the USD rise remains hard to oppose in the absence of weak data, particularly since the weak Empire manufacturing survey yesterday was ignored. A negative equity market response suggests the USD gains may be stronger against the riskier currencies, with the AUD already under pressure after the slightly weaker than expected Chinese data and the weak Chinese equity performance overnight.
