Some quick pointers for the UK retail sales report
Last month sales smashed expectations coming in at 1.1% vs 0.4% prior. At the time I noted that I thought the expectations were very low given the strong discounting/shopping event month that Nov is. We have the potential to see another wild variation now we’re into Dec.
There’s two risks here. Expectations are for a fall of 0.6%-1.0% today, which is probably set about right to see some of the spending in Nov ease,. However, last month the ONS noted that the seasonally adjusted data may not have been accounted for all of the Black Friday period, and that Cyber Monday was not included. That potentially means that sales might not fall as much as expected in today’s report. There’s even a very slim chance of seeing another gain.
On the basis of expectations, the market is looking for bad numbers so the main price risk is for better numbers. Anything better but still negative probably won’t bring much of a move. If we do see a flat to positive report then the current intraday double top in cable will probably be taken out. One other trade to look at would be buying a dip on a bad number, considering the strong uptrend we’re seeing today. It’s doubtful retails will cause today’s moves to completely reverse unless it’s a very bad number.