USD/JPY Buy Signal Hits TP Target, After Positive US Retail Sales

• September retail sales MoM +0.7% vs -0.2% expected
• August sales were +2.5%
• Core retail sales ex. autos +0.8% vs +0.5% expected
• August core sales ex. autos were +1.8
• Retail sales control group +0.8% vs +0.4% expected
• August control group was +2.5%
• Retail sales ex. auto and gas +0.7% vs +2.0% prior
• Full report (pdf)

Never underestimate the spending power of the US consumer. I highlighted some Bank of America card spending data that pointed to a miss in this data, and it made sense. Well, the opposite happened with a very good report, pending the details.

• Furniture +0.2%
• Electronics and appliances -0.9%
• Clothing +1.1%
• Building materials +0.1%
• Food and beverage stores +0.7%
• Health and personal care stores -1.4%
• Sporting goods and hobbies +3.7%
• General merchandise +2.0%
• Non-store (online) +0.6%
• Food service and drinking places +0.3%

I find it interesting that building materials are up 5.8% YoY. The narrative out there is that home building and renovations have slowed, and that lumber prices are dead. However, they’ve been creeping up, and that’s from last year’s strong base.