USD flows: USD not much changed after data, but Philly Fed strong

US December retail sales have come in broadly in line with expectations. Although headline and core were both slightly on the soft side of consensus, the retail control group, which is the relevant measure for GDP, was stronger than expected at 0.7%. So as a whole the data wasn’t significantly different from consensus. But the Philadelphia Fed survey was notably much stronger than expected in January, hitting its highest since April 2021. This series has been quite volatile, and not particularly reliable as an indicator for the US economy, but is nevertheless strong enough to provide modest USD support. Even though the USD is marginally lower after the data, we would expect it to stabilise near current levels.