Advance U.S. retail sales are forecasted to have risen by 0.5% in May after an unexpected 0.4% decline the month prior.
| June 11 | U.S. Retail Sales (MAY)(GMT 12:30: 08:30 EDT) |
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| Expected: 0.5% |
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| Previous: -0.4% | |
Fundamental Outlook
Advance U.S. retail sales are forecasted to have risen by 0.5% in May after an unexpected 0.4% decline the month prior. Unemployment at rising to 9.4% has continues to limit consumer‘s ability to increase spending in discretionary items which may lead to another shortfall in May. However, signs that the economy is improving has fueled optimism which could translate into increased demand. Indeed, the U.S. consumer confidence indicator jumped the most in six years to 54.9 from 40.8 last month as rising equity markets and stabilizing house prices have eased fears. The past two months we have seen electronic sales fall 2.8% and 7.8% respectively which could see a reversal as retailers cut prices to lure buyers. Additionally, rising gasoline prices should lead to higher receipts at the pump which will push the headline number higher. Strong consumer consumption should spark risk appetite which has been a negative for the dollar. However, last week’s jobs report fueled bullish greenback sentiment, when it showed fewer losses than expected. Therefore, a positive dollar reaction is a possibility and would validate the bullish technical outlook which is calling for a sharp decline in the EUR/USD.
Technical Outlook
