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investingLive Americas FX news wrap 15 Aug; Trump and Putin meet with peace on the line | investingLive

U.S. retail sales for the month rose 0.5%, matching expectations, following a revised 0.9% increase in June (originally reported at 0.6%). The ex-auto reading also came in as expected, but the prior month was revised higher to 0.8% from 0.6%. The control group, which strips out volatile components and is a key input for GDP calculations, rose 0.5%, slightly above the 0.4% forecast, after a solid 0.8% gain in June.

At the same time, import prices posted a stronger-than-expected increase of 0.4% versus a flat reading anticipated, a reminder to traders of the upward pressure from tariffs. This came on the heels of a mixed inflation picture earlier in the week: CPI matched forecasts at 0.3%, but PPI surged 0.9%, well above expectations.

The University of Michigan preliminary consumer sentiment index came in weaker than expected at 58.6 versus 62.0 expected, though still well above the year’s low near 50.8. However, it remains sharply below the year’s peak around 73. Inflation expectations ticked higher, with the 1-year outlook at 4.9% (up from 4.5%) and the 5-year outlook at 3.9% (up from 3.4%).

Fed rate cut expectations for September have eased notably — now at 84% versus 94% yesterday and 100% earlier this week. Several Fed officials have taken a more cautious tone. Fed’s Goolsbee noted “a note of unease” following the CPI and PPI releases, expressing particular concern over service-sector inflation running hotter than expected. While goods inflation is the channel where tariffs are typically felt, the combination of rising goods and services inflation is more worrisome. Goolsbee stressed the need for more data and hoped the recent figures were a one-off, but acknowledged that the latest inflation readings have tempered some of the Fed’s confidence.

Looking ahead:

  • Fed Chair Powell speaks at the Jackson Hole Symposium on Friday at 10:00 AM ET — the key event of the week.

  • Reserve Bank of New Zealand meets Tuesday night (10:00 PM ET) and is expected to cut rates by 25 bps.

  • Canada CPI due Tuesday at 8:30 AM ET.

  • Flash manufacturing PMIs for Europe and the U.S. plus initial jobless claims arrive Thursday.

  • UK CPI comes Wednesday, with BoE Governor Bailey speaking Saturday. Recall the Bank delivered a hawkish cut at its last meeting.

US yields today moved higher after trading lower earlier in the day.

  • 2-year yield 3.752%, +1.4 basis points
  • 5-year yield 3.837%, +1.7 basis points
  • 10 year yield 4.319%, +2.7 basis points
  • 30 year yield 4.921%, +3.8 basis points.

Crude oil fell in hopes of a step toward peace between Russia and Ukraine.

Pres. Trump and Russia’s Pres. Putin are meeting in Alaska with hopes for a cease-fire and a potential summit between Ukraine’s Zelenskiy and the Russian leader. Let there be peace on earth.

US stocks closed mixed/lower. If it wasn’t for UnitedHealth, the Dow industrial average which rose by 34 point would’ve been in negative territory. Shares of UnitedHealth rose by over 11% on the day after Berkshire Hathaway reported that the created position in the company.

The closing levels showed:

  • Dow industrial average up 34.86 points or 0.8% at 44946.12. The Dow industrial average did try to a new intraday high 45203.52
  • S&P index fell -18.74% or -0.29% at 6449.80.
  • NASDAQ index fell -37.69 points or -0.40% at 21622.98.