Consumer Economy
Retail Sales (RSAFS); $735B +10.3B (+1.41% m/m)
Industrial Production (INDPRO); 103.9 -0.33 (-0.32% m/m)
Retail Sales did very well (17% annualized), while Industrial Production moved lower. While Industrial Production hints at recession, Retail Sales is saying the opposite.
Is the big jump in Retail Sales just about buying stuff “pre-tariffs”? Wolf points out that the surge was also seen in restaurants and bars, which would not be about “front-running tariffs.” So the answer seems like some front-running and some not.
Drunken Sailors Back in Splurge Mode, Retail Sales Surge. Even at Restaurants & Bars not Part of Frontrunning Tariffs [Apr 16]
(source – wolfstreet)
Credit & Rates
Fed Balance Sheet (WALCL); 6.727T -303M, (-0.00% w/w)
Total Bank Credit (TOTBKCR); 18.223T +51.4B, (+0.28% w/w)
30 Year Mortgage Rate (MORTGAGE30US); 6.83% +21 bp
10 Year Treasury (DGS10); 4.33% -15 bp
20+ Year Treasury ETF (TLT); +0.74% w/w
No QT from the Fed, and there was a big jump in bank credit (14.6% annualized). That’s expansionary.
At the same time, this week saw a nice drop (-15 bp) in the 10-year yield, which erased a third of last week’s YUGE move higher. Mostly, money flowed into the 5-10 year durations, as we can see from the rates chart below:
CME Fedwatch Tool projects a 13% chance of one cut at the May 7th meeting.
Currencies
The buck continued to turn into confetti, dropping 0.76 (-0.76%) to 99.13. The buck remains in a strong downtrend. No low in the buck is yet visible.
Winners: EUR (+0.60%), GBP (+1.78%), JPY (-1.00%), AUD (+2.07%).
RMB inched higher (+0.13%), which is bad if you own RMB. It is one of the only “losers” this week vs USD, and the loss wasn’t all that substantial.
We saw a new 3-year high for the USD/EUR. If war is coming, it isn’t showing up in currency moves just yet.
Here’s a little more context for moves in the Euro, related to interest rates in the two regions (US and EU).
by davefairtex 
