CANADA DATA: Retail Sales Pulling Back To Start The Year
Retail sales fell 0.4% M/M SA in February per the StatCan flash estimate, which if confirmed in the final reading would mark a second consecutive pullback after -0.6% in January.
- For January, for which detailed stats were released, core sales (ex-autos/gas) fell 0.2% M/M, only a modest pullback after December's outsized 2.9% rise. In a more substantial reversal, real retail sales fell 1.1% M/M, vs 2.5% growth in December.
- As our Policy team notes, there were mixed results across other categories during a time when consumers benefited from a temporary sales tax holiday and lower interest rates. Food and beverage sales fell 2.5% in January while furniture and appliances gained 3%.
- Explaining the divergence between the core and headline pullbacks, January saw a 3.2% M/M decline at new car dealers, reflecting the end of some provincial rebates on electric vehicles that boosted sales through the fourth quarter, with overall motor vehicle and parts sales (almost 30% of retail sales) down 2.6%.
- We await the final February sales data, but the last back-to-back fall in retail sales were in May/June 2024.
- January GDP, which incorporates the retail sales data, will be out next week - consensus coming into the day was for 0.3% M/M growth, after 0.2% in December.
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USDJPY TECHS: Key Resistance Remains Intact
- RES 4: 158.87 High Jan 10 and a bull trigger
- RES 3: 156.75 High Jan 23
- RES 2: 155.89 High Feb 3
- RES 1: 154.24/80 50-day EMA and a pivot resistance / High Feb 12
- PRICE: 151.51 @ 16:11 GMT Feb 19
- SUP 1: 150.93 Low Feb 07 and a bear trigger
- SUP 2: 149.69 Low Dec 9
- SUP 3: 148.65 Low Dec 3 ‘24 and a key support
- SUP 4: 148.01 Low Oct 9 ‘24
USDJPY continues to trade below the Feb 12 high. Recent weakness highlights that - for now - a key resistance around the 50-day EMA, at 154.24, remains intact. A clear break of the EMA is required to confirm a stronger bullish reversal. This would open 155.89, the Feb 3 high. Key support and the bear trigger is unchanged at 150.93, the Feb 7 low. Clearance of this level would resume the bear cycle that started on Jan 10.
MNI: FED MINUTES: WANT FURTHER DISINFLATION BEFORE NEXT CUT
- FED MINUTES: WANT FURTHER DISINFLATION BEFORE NEXT CUT
- FED: CAN TAKE CAREFUL APPROACH ON CUTS GIVEN UNCERTAINTY
- FED SAW INCREASED UPSIDE RISKS TO INFLATION IN JAN MEET
- 'VAST MAJORITY' OF FOMC STILL BELIEVES POLICY RESTRICTIVE
- VARIOUS OFFICIALS-CAN SLOW OR PAUSE QT DUE TO DEBT TALKS
- TRADE, IMMIGRATION COULD HINDER DISINFLATION PROCESS-FED
EURGBP TECHS: Pivot Resistance Stays Intact For Now
- RES 4: 0.8474 High Jan 20 and a key resistance
- RES 3: 0.8420 76.4% retracement of the Jan 20 - Feb 3 bear leg
- RES 2: 0.8388 61.8% retracement of the Jan 20 - Feb 3 bear leg
- RES 1: 0.8347/78 50-day EMA / High Jan 6 and pivot resistance
- PRICE: 0.8278 @ 16:09 GMT Feb 19
- SUP 1: 0.8266/8248 Low Feb 19 / 3 and bear trigger
- SUP 2: 0.8223 Low Dec 19 and a key support
- SUP 3: 0.8203 Low Mar 7 ‘22 and a lowest point of a multi-year range
- SUP 4: 0.8163 123.6% retracement of the Dec 19 - Jan 20 bull leg
EURGBP traded lower again overnight but - for now - remains inside a range. The early February bounce still appears to have undermined a recent bearish threat. Attention is on 0.8378, the Jan 6 high and a key short-term pivot resistance. Clearance of it would strengthen a bullish condition and signal scope for a stronger recovery. For bears, a resumption of weakness would once again refocus attention on 0.8248, the Feb 3 low and the bear trigger.
