Retail sales in the US was the big news of yesterday. Sales at US retailers rose in July as demand grew from cars to clothing, with the bullish reading wiping out the previous month’s losses, giving the Dollar a boost yesterday afternoon. Consumer spending is driving growth in the world’s largest economy and yesterday’s 0.6% reading has added further fuel to the fire for the Fed to raise rates this year. The consumer driven recovery is picking up pace and the outlook remains strong for the second half of the year.
The Chinese Yuan fought back against mammoth losses made earlier in the week after the People’s Bank of China devalued the Redback. The PBOC said in a statement that there was no basis for the depreciation to persist and that it would step in to control large fluctuations, giving the Yuan some support and simmering down fears of a currency war.
Eurozone GDP and inflation figure will be closely watched this morning. The data from the Eurozone is not expected to paint a very rosy picture of the region, with consumer prices forecast to fall 0.6% after an anaemic June. In the afternoon, the US releases the producer price index and University of Michigan Consumer Sentiment.