• Retail sales rose by 0.1% m/m versus 1.1% before

• Retail control group up 0.3% m/m as projected

• Dollar gains some ground

Following an upwardly revised 1.1% spike in July, retail sales in the US increased by 0.1% month-over-month in August, surpassing estimates of a 0.2% fall. The retail sales control group remained unchanged at 0.3%. The retail sales data is crucial as it reflects consumer demand, which is a key factor in the Fed’s monetary policy decisions.

Market pricing indicates a 67% chance that the Fed will restart its easing cycle with a 50bps cut, compared to only 33% for a 25bps cut. This marks a significant shift from last week, when expectations for a 50 bps rate cut had diminished as US recession fears ebbed. But now, the Fed is expected to cut rates by 125 bps during the next three policy meetings until the end of the year.

The dollar's reaction was slightly up at the time of the data release, but the Fed decision tomorrow may shake the market. Dollar/yen is currently hovering around 141.00, euro/dollar is falling marginally below the 1.1150 key level, pound/dollar is hovering near 1.3200, and the dollar index is holding slightly above the 100.00 round number. The US 500 index is nearing its all-time high, potentially setting a new record peak in the near future, while gold is currently trading near $2,600.