Retail Sales Risks Tilted To The Downside, What Does It Mean For The Dollar?

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Markets

There was a lot of fuss about energy prices yesterday. Gas prices along with electricity and oil jumped amid a looming/unfolding European energy crisis. Natural gas (UK futures) eventually finished the day 7.5% higher while a barrel of Brent oil again closed north of $75 for the first time since end-July. Energy-related stocks unsurprisingly outperformed hugely. That didn’t provide a strong enough counterweight for European indices (finished +/- 1% in red) where o.a. utilities fell amid European governments intervening to cap surging market prices. There were less such concerns on WS (+ <1%). Core bond yields initially fell but reversed course after the US joined and judged that rising commodities is still part of a reflationary rather than stagflationary environment. The US yield curve bear steepened with changes ranging from 0.4 bps (2y) to 1.5 bps (10y). German yields inched 3.4 (10y) to 4 bps (30y) higher. The US greenback was sold…

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