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  • No QE Taper Till 2Q At Earliest Based On U.S. Data 0 comments
    Oct 29, 2013 11:43 AM

    Retail sales, consumer confidence belie Fed's hoped-for improvement in growth, while PPI shows no pipeline pressure to ease disinflation concerns, Bloomberg strategist TJ Marta writes.

    • Lack of improvement in growth, inflation pushes likelihood of QE taper start to 2Q at earliest; Bloomberg Economic Surprise Index -0.56, trending lower

    • NOTE: Retail sales, PPI reports are for Sept., prior to govt shutdown

    • Retail sales disappointed overall
    • Total sales -0.1% M/m vs est. 0.0%, first negative print since Mar., 3rd consecutive decline from +0.7% June report
    • Sales ex-auto, gas +0.4% vs est. +0.5%
    • Ex-auto sales as-expected +0.4%
    • Sales control group +0.5% vs est. +0.4%

    • Consumer confidence largest drop since 2011, to 71.2 vs est. 75.0, prior 80.2
    • Echoes surprise drop in U. Mich. report
    • Likely due to govt shutdown, uncertainty regarding budget, debt, healthcare policy going forward

    • PPI provides little expectation for end of disinflation
    • Overall -0.1% Y/y vs est. +0.2%, first negative since Apr.; +0.3% Y/y vs est. +0.6%, low since 2009
    • Ex-food & energy as-expected, +0.1% M/m, low end of range since 2009, 1.2% Y/y, low end of range since 2004

    • NOTE: TJ Marta is an FX strategist who writes for First Word. The observations he makes are his own.

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