CIBC Research discusses its reaction to today's US retail sales report for the month of June.
"A firm rise in retail sales caps off a strong rebound in Q2 consumption from what had been a soft gain in the opening trimester. The increase of 0.4% was ahead of consensus, and above our own bullish call, on the back of relatively broad-based gains. Autos were up 0.7%, despite unit auto sales suggesting an only flat reading. Gasoline weighed on the headline, as expected, down 2.8% in June, but was offset by a strong gain in core sales of 0.7%. The three-month annualized pace of headline and core both stand at 7.5%, both up from what had been a soft first quarter for household spending, which coincided with the US government shutdown," CIBC notes.
"Overall, the numbers should reduce market pricing for more than a quarter-point rate cut by the Fed later this month, but shouldn't do much to alter most Fed members' belief that policy needs to be eased at the next meeting," CIBC adds.