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Kiwi Kept In Check Despite Risk-On Impulse


(Z1) Strong Weekly Close

By Sara Haire and Holly Stokes
     WASHINGTON (MNI) - US retail sales will be released Friday, with the median
forecast among analysts in an MNI survey expecting a 0.4% gain for headline and
a 0.3% rise ex-auto. However, there is a wide range of forecasts, from up 0.2%
to up 0.7% for retail sales - with the high side matching the whisper number. 
     Below are five points we feel warrant particular attention prior to the
data release:
     - In the past 10 years, MNI surveys show that analysts have overestimated
December retail sales 7 times, with only 2 underestimates - suggesting a
possible downside risk. With markets already pricing in above MNI's survey
estimate, a soft print could strengthen Treasuries. 
     - In the past 10 months, when the whisper number misses, the absolute
average miss was 0.59pp compared with the actual result. This is larger the
0.25pp absolute average miss for the MNI survey of analysts over the same
period. Recently, the whisper number for retail sales has been overestimated 6
of the last 10 months. The average of the overestimate for the whisper number is
0.55pp. Analysts in the MNI survey have overestimated 5 times in the same time
period, with the average overestimate of 0.30pp.
     - Given November's 0.8% leap, some analysts wonder if December's holiday
shopping will fall below what is expected by seasonal adjustment factors.
However, Mastercard Spendingpulse report suggests continued gains, with November
1 - December 24, 2017 spending 4.9% higher than the same period for 2016. This
is the largest year/year increase since 2011. Mastercard also noted that there
was a late season rally, with December 23 posting the second highest single-day
spending after Black Friday.
     - Hurricane damage has led to a surge in vehicle sales since August. In
November, vehicle sales increased by 7.0% unadjusted year/year, but still
slipped down 0.2% monthly given October's strong gains. Now analysts wonder if
motor vehicles will post the first clean reading since the storms, with industry
data suggesting continued strength.
     - The control group (excluding motor vehicles, gas, and building
materials), which feeds directly into the consumption calculation for GDP, may
post a softer 0.3% gain after November's 0.8% jump. However, analysts note that
this would still support the view for solid consumption growth in the 4th
--Compiled with assistance from Kevin Kastner
--MNI Washington Bureau; +1 202-371-2121; email:
--MNI Washington Bureau; +1 212-800-8517; email: