• Retail sales in the US rise by more than expected in September
• Initial jobless claims are also better than expected
• US dollar edges higher after the data

It’s a hat-trick of stronger-than-expected data for the US economy as retail sales, weekly jobless claims and the Philly Fed manufacturing index all beat their forecasts on Thursday. Retail sales rose by 0.4% m/m in September, topping estimates of 0.3% and accelerating from the prior 0.1% reading. The core control group measure, which looks at underlying sales and is used in GDP calculations, increased by a solid 0.7% over the month, well above expectations of a 0.3% rise.

Meanwhile, fewer people applied for unemployment benefits in the week ending October 12, with claims falling from 260k to 241k. The Philadelphia Fed’s manufacturing gauge also beat expectations, improving from 3.0 to 10.3 in October.

The US dollar reversed higher after the data, as expectations of aggressive Fed rate cuts suffered yet another blow. Whilst 25-bps reductions in both November and December seem safe, a rate cut at the January meeting hangs in the balance.

Dollar/yen briefly spiked above 150.00, while euro/dollar slipped to a low of 1.0832. US stock futures, however, remained positive as the risk of a hard landing declined further.