Forex Signal (Wed April 13 8:30am NY Time EST) - US Core Retail Sales

Henry Liu

Former FPA Special Consultant
We’ll be getting the Core Retail Sales (and Retail Sales) figure out of U.S. today, as high impact news releases are concerned, Retail Sales makes up about 2/3 of U.S. GDP (economy)… Here’s the forecast:

8:30am (NY Time) US Core Retail Sales Forecast 0.7% Previous 0.7%

The Trade Plan
The plan to trade this release is straight forward. We are going to wait for 1.2% release or better to BUY USDJPY, or a 0.2% or worse to BUY GBPUSD… If we get a in-between release, we’ll need to look at the pre-release market condition and sentiment in order to make a decision, or just stay out of the market altogether.

We will trade this news release using after news retracement method, I will pay attention to both headline and Core Retail Sales figures, but my focus will be on the Core figure.

Henry's News Trading Method

The Market
Core Retail Sales, or Retail Sales ex Auto is expected to be around 0.7% with a headline marker of .5%.

Saks Inc. and Macy’s Inc. were among retailers that beat most analysts’ estimates in the month of February, and if this is of any indication, we should expect a release figure near the forecast or better. The rise in numbers reflects an improvement in the labor market. The economy created 216,000 jobs last month, the most since May 2010, dropping the jobless rate for the 4th straight month.

Manufacturing continues to lead the recovery. Fast growing foreign markets like China lifted the demands for U.S. goods, reducing the trade deficit by almost 2 billion dollars.

Additional Thoughts
Since both releases (Core Retail Sales and Retail Sales) are scheduled together, if we get a conflict in the releases, we should stay out regardless whether or not we get our tradable deviation…

Pre-news Consideration
There should be no pre-news trading.

“(Retail Sales Core) Derivative of Retail Sales that excludes the Automobile Sales component. Automobile Sales make up roughly 25% of Retail Sales, but they can be very volatile from month to month and can distort the picture. Retail Sales with the exclusion of this volatile component is thought to be a better indicator of the underlying trend in consumer spending.”

Historical Chart and Data for US Core Retail Sales


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