News Digest: US retail sales blowout shakes bond, currency markets

April 18, 2024

News Digest:

Retail sales numbers for March in the United States emerged much stronger than expected, suggesting that consumers were spending in spite of the uncertainties around the future of interest rates. This sparked a sell-off in US government debt and shook global currencies.

According to a news report, these events point to the world’s largest economy running too hot to justify a cut in key interest rates. US Census Bureau data published earlier in April showed that retail sales, including food and petrol, rose 0.7% in March as against the market expectation of about 0.3%.

These numbers for February were revised up to 0.9% from the earlier 0.6% suggesting that consumer spending was resilient in 2024 compared to 2023. These numbers also triggered fears of higher inflation in the coming weeks. Prices of US Treasuries dropped upon the release of this data and pushed yields further.

Yields on the 10-year note rose to a five-month high of 4.63% while the two-year yield rose by around 4.94%. In the currency segment, the retail numbers boosted the US dollar index with the Yen falling 0.7%

End Notes