US retail sales dominated yesterday’s economic docket, as markets heavily scrutinise US data ahead of next week’s FOMC meeting. The missing in action US service sector returned yesterday as retail sales exceeded market expectations posting a figure of 1.2%. The data showed that American consumers are finally ready to spend on more than just automobiles, unlocking months of savings from cheap gasoline and higher incomes as the labour market improves. A pickup in purchases accompanied by faster wage growth would substantially increase optimism on the outlook for growth this year.
The IMF said that its team, negotiating with Greece, has left Brussels after failing to make progress on a debt deal that would help the country to avoid default. An IMF spokesman told media “the ball is very much in Greece’s court” and that “there has been no progress in narrowing these differences recently”. The IMF’s decision to withdraw its team has fuelled speculation that Greece could default and ultimately exit the Eurozone.
US inflation will be today’s main focus along with consumer sentiment as the market continues to debate next week’s FOMC meeting. US PPI is forecast to increase to 0.4% whilst consumer sentiment in the States is expected to improve to 91.3. In addition, any newswires surrounding Greece ahead of the weekend will be keenly followed.