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Retail Sales counted twice actually

Written by A Forex View From Afar on Friday, February 15, 2008

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Equities rose today on better then expected Retail Sales numbers. Markets had expected a -0.2% decline on month to month basis, while the released numbers came in at 0.3%.
Lately, almost every major news release has something pessimistic to say. This report was a breath of air that equities and markets around the world really needed. With all this, I have to say markets have been tricked again this time.

Two things I’ll like to point out, firstly Retail Sales are not adjusted to inflation. It’s very likely inflation will be bigger or at least equal to 0.3% (how it was on the last 4 releases).
This will bring down Retail Sales to 0.0% growth or very close to it, which means Retail Sales didn’t do so well.

The best part comes now and we’ll start with a puzzle…What are the similarities between NFP and Retail Sales?

They are both calculated based on previous data. Remember the infamous death/bird model? Retail Sales are very close too.
The Numbers released today are mostly based on 2006 retail sales and those numbers were very good. From January 2005 to January 2006 there was a 10% growth in Retail Sales, while the average for this period is about 5%.

I’m starting to feel that the retail sales are just a fake hope, but don’t worry, tomorrow could be much worse

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