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Total retail sales increased 0.3% month-over-month in May (consensus 0.0%). Excluding autos, retail sales increased 0.1% month-over-month (Briefing.com consensus +0.1%).
The key takeaway from the report is that spending was flat or up in May across nearly every retail category with the exception of gasoline stations (-2.6%) and miscellaneous store retailers (-1.0%), which speaks to the enduring spending capacity of U.S. consumers who continue to be bolstered by a strong labor market.
May import prices declined 0.6% month-over-month following a downwardly revised 0.3% increase (from 0.4%) in April. Excluding fuel, import prices were down 0.1% following an unchanged reading for April.
Export prices declined 1.9% month-over-month following a downwardly revised 0.1% decline (from 0.2%) in April. Excluding agricultural products, export prices declined 1.8% following a downwardly revised 0.1% decline (from 0.2%) in April.
The key takeaway from the report is the deflation seen in import prices year-over-year (-5.9%), nonfuel import prices year-over-year (-1.9%), export prices year-over-year (-10.1%), and non-agricultural export prices year-over-year (-10.5%).
Initial jobless claims for the week ending June 10 were unchanged at 262,000 (consensus 251,000). Continuing jobless claims for the week ending June 3 increased by 20,000 to 1.775 million.
The key takeaway from the report is that initial jobless claims have elevated in recent weeks, yet they remain well below levels north of 375,000 that have been seen in all recession since 1980.
The June Philadelphia Fed Index slumped to -13.7 (consensus -13.0) from -10.4 in May.
The key takeaway from the report is that June was the tenth consecutive negative reading, pressured by another negative reading for the new orders index (to -11.0 from -8.9).
The June Empire State Manufacturing Survey surged to 6.6 (Consensus -16.0) from -31.8 in May.
The key takeaway from the report is that the index for future business conditions jumped to 18.9 from 9.8, which is the second consecutive increase and suggests firms have become more optimistic about conditions improving over the next six months.
Industrial production fell 0.2% in May (consensus 0.1%) from a 0.5% increase in April.
Capacity utilization fell to 79.6% (consensus 79.7%) from a revised 79.8% in April (from 79.7%).S&P 500 futures are down 8 points and are trading 0.2% below fair value.
Nasdaq 100 futures are down 55 points and are trading 0.4% below fair value.
Dow Jones Industrial Average futures are up 4 points and are trading roughly in line with fair value.Treasury yields are moving higher.
The 2-yr note yield is up five basis points to 4.75%
The 10-yr note yield is up three basis points to 3.83%.Equity indices in the Asia-Pacific region ended the week on a higher note.
Japan’s Nikkei: +0.7% (+4.5% for the week),
Hong Kong’s Hang Seng: +1.1% (+3.4% for the week),
China’s Shanghai Composite: +0.6% (+1.3% for the week),
India’s Sensex: +0.7% (+1.2% for the week),
South Korea’s Kospi: +0.7% (-0.6% for the week),
Australia’s ASX All Ordinaries: +1.1% (+1.9% for the week).Singapore’s May trade surplus $5.491 bln (expected $5.982 bln; last $4.762 bln).
May non-oil exports -14.6% m/m (expected -0.8%; last 2.6%); -14.7% yr/yr (expected -9.1%; last -9.8%)
New Zealand’s May Business PMI 48.9 (expected 50.2; last 49.1)Westpac expects the Reserve Bank of Australia to reach a terminal rate of 4.60% in August.
The Bank of Japan left its interest on excess reserves at -0.10% and reiterated intentions to patiently continue with monetary easing.
Bank of Japan Keeps Monetary Policy Steady, No Change to JGB Yield Band as Expected
There were ongoing expectations that China’s State Council will announce stimulus measures imminently and there was speculation about a reserve requirement ratio cut.
Major European indices trade in positive territory.
STOXX Europe 600: +0.5% (+1.5% week-to-date),
Germany’s DAX: +0.4% (+2.6% week-to-date),
U.K.’s FTSE 100: +0.4% (+1.2% week-to-date),
France’s CAC 40: +1.0% (+2.1% week-to-date),
Italy’s FTSE MIB: +0.4% (+2.6% week-to-date),
Spain’s IBEX 35: +0.6% (+1.9% week-to-date).Eurozone’s May CPI 0.0% m/m, as expected (last 0.6%); 6.1% yr/yr, as expected (last 7.0%).
May Core CPI 0.2% m/m, as expected (last 1.0%); 5.3% yr/yr, as expected (last 5.6%).
Q1 wages 4.6% yr/yr (expected 3.3%; last 5.0%) and Q1 Labor Cost Index 5.0% yr/yr (expected 3.3%; last 5.6%)Italy’s May CPI 0.3% m/m, as expected (last 0.4%); 7.6% yr/yr, as expected (last 8.2%).
April EU trade deficit EUR920 mln (last deficit of EUR830 mln)Several European Central Bank policymakers made hawkish comments, solidifying expectations for another 25-bps hike in July. Officials are reportedly split about the need for a follow-up hike in September.
French Finance Minister Le Maire said that EU members are looking to reform fiscal rules by the end of 2023.
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