U.S. Retail Sales Expanded in September
U.S. retail sales data for September indicated a notable increase of 0.8%, signaling a solid yet decelerating consumer spending environment compared to August's revised growth of 1.3%. This sequential slowdown could reflect potential consumer caution amid rising interest rates and inflationary pressures, raising questions about future spending trends. The data reinforces the narrative of a resilient economy, but the slight dip in growth may affect the USD's trajectory as market participants recalibrate forecasts for the Fed's policy stance.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.075 (median across 8 firms), with Goldman at the upper bound (1.12) and BofA at the lower (1.04). The Wall Street Journal's report aligns with the upper third — JPMorgan and ING share that framing.
How firms align
JPMorgan's current target of 1.10 aligns with the positive outlook suggested by the retail sales increase. However, BofA takes a contrary position with a more bearish target of 1.04. For more specifics, please refer to our internal /reports/jpmorgan and /reports/bofa pages.
What the data shows
Recent research suggests that, despite the robust spending aggregate, forecasts may need adjustment downward, reflecting caution in consumer behavior. See our related Insight at /research/adjusting-spending-forecasts.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01U.S. retail sales up 0.8% in September, below August's 1.3%.
- 02Market adjusting for the Fed's potential policy changes.
- 03Need to monitor upcoming economic indicators for further clarity.
Market implications
Key levels to watch include the USD's response to upcoming labor market reports and consumer confidence indexes, which will further influence our consensus target of 1.075. Stakeholder positioning ahead of the next Fed meeting might also play a critical role.
Risks to this view
A significant reversal could occur if inflation data indicates unexpected strength or if labor market reports reveal sharp increases in employment, prompting the Fed to maintain or tighten its policy stance more aggressively than anticipated.
Sentiment by currency
USD+EUR JPY GBPComposite USD score: +0.60
Sources & References
How we cover this story