Retail Strength Signals Slower Cuts

Date: January 15, 2026

Retail Strength Signals Slower Cuts

Summary

Market Snapshot

Prior Close
Asset Level Days Change
S&P 500 6,894.60 -1.06%
Nasdaq 23,709.87 -0.10%
Spot VIX 16.14 -3.64%
2 Year Bond Yield 3.54 +2 bps
10 Year Bond Yield 4.14 +1 bps
EUR/USD 1.1634 -0.08%
USD/JPY 158.48 -0.07%
GBP/USD 1.342 -0.08%
WTI Oil 61.15 +2.77%
Gold 4,618.15 -0.21%
Bitcoin 96,785.53 -0.17%

Prior Economic Events

Data Prior Cons Actual
MBA 30-Year Mortgage Rate6.25-6.18
Producer Price Index Month-over-Month0.60-0.10
Producer Price Index Month-over-Month0.100.200.20
Retail Sales Month-over-Month-0.100.400.60
Core PPI Month-over-Month0.300.200
Core PPI Month-over-Month0.40-0.30
Current Account Balance-249.2m-238.4m-226.4m
Retail Sales Control Group Month-over-Month0.600.400.40
Retail Sales Excluding Autos Month-over-Month0.200.400.50
Speech by Fed's Paulson---

Upcoming Economic Events

Data Prior Cons Time
Export Prices Month-over-Month-0.2008:30
Import Prices Month-over-Month--0.1008:30
Weekly Jobless Claims208,000215,00008:30
NY Empire State Manufacturing Index-3.90108:30
Philadelphia Fed Manufacturing Index-10.20-208:30
Philly Fed Business Conditions41.60-08:30
Philly Fed CAPEX Index30.30-08:30
Philly Fed Employment12.90-08:30
Philly Fed New Orders5-08:30
Philly Fed Prices Paid43.60-08:30

Yesterday's Recap

Retail sales rose 0.6% m/m, beating the 0.4% consensus, driven by strength in ex-autos and control group categories, suggesting robust consumer demand despite high interest rates. Producer prices moderated, with PPI up 0.1% and core PPI flat at 0.0%, indicating cooling inflationary pressures in manufacturing. The current account deficit narrowed to -$226.4B from -$249.2B, better than expected -$238.4B, reflecting improved trade balances. Fed's Paulson spoke on economic policy, emphasizing data-dependent decisions without new rate signals.

The Day Ahead

Export and import prices are due at 8:30am, expected at 0.2% and -0.1% m/m respectively, to assess trade inflation dynamics. Weekly jobless claims at 8:30am may show stability at 215K claims, following the prior 208K. Empire State and Philly Fed manufacturing indices at 8:30am are forecasted at 1 and -2 respectively, providing early signals on regional economic activity.

Other Economic Notes

Canada's deepening trade ties with China amid US tariff concerns could shift global supply chains and impact North American manufacturing. Goldman Sachs views US equities positively, citing undervaluation and potential recession risks below 25%, supporting long-term growth. Venezuela's oil prospects under US control may boost crude supplies, benefiting complex refiners but risking geopolitical tensions.

Fed Watch

In the rate-cutting cycle, recent data suggests a cautious approach, with retail strength and moderating PPI supporting fewer cuts in 2025. Powell may emphasize data dependence, tilting dovish toward more gradual easing rather than aggressive reductions. Markets pricing fewer cuts reflects hawkish undertones from resilient economic indicators, though inflation cooling keeps the door open for further adjustments.


Source: https://robomacro.com/Research_Notes/US_Macro_Daily_20260115.html