19 Nov 2013
Flash: USD subject to impact of shutdown – TD Securities
FXstreet.com (London) - Tim Davis, Global Strategist, Rates and FX Research at TD Securities said, later this week, the October retail sales and existing home sales reports will provide some important context for the market on the impact of the government shutdown.
Key Quotes:
“Our below-consensus forecasts are for both reports to be disappointing, with the pace of existing home sales to post a 3.6% m/m drop to 5.10M units. (mkrt: 5.15M units). This will mark the slowest pace of home sales since June as the drag from higher mortgage rates tempers activity and is largely consistent with the weak tone in the pending home sales report, which showed a dramatic 5.6% m/m drop in September”.
“We expect weaker vehicle sales and falling gasoline prices to dampen overall retail spending activity in October, offsetting gains in other spending categories. During the month, we expect headline retail sales and sales excluding autos to remain flat, following an equally disappointing performance in the month before”.
“Despite the weakness in the headline numbers, core spending activity should post a more respectable 0.3% m/m gain, as the 5% drop in gas prices provides a much-needed windfall for US households”.
Key Quotes:
“Our below-consensus forecasts are for both reports to be disappointing, with the pace of existing home sales to post a 3.6% m/m drop to 5.10M units. (mkrt: 5.15M units). This will mark the slowest pace of home sales since June as the drag from higher mortgage rates tempers activity and is largely consistent with the weak tone in the pending home sales report, which showed a dramatic 5.6% m/m drop in September”.
“We expect weaker vehicle sales and falling gasoline prices to dampen overall retail spending activity in October, offsetting gains in other spending categories. During the month, we expect headline retail sales and sales excluding autos to remain flat, following an equally disappointing performance in the month before”.
“Despite the weakness in the headline numbers, core spending activity should post a more respectable 0.3% m/m gain, as the 5% drop in gas prices provides a much-needed windfall for US households”.