Powell touted January rebound

US January retail sales data is due out Monday at 8:30 am ET (1230 GMT) and the number is sure to have an outside impact on the US dollar, especially after Friday's poor non-farm payrolls headline.

The consensus is for a flat reading after a 1.2% in December. However the spot to watch is always the control group, which excludes volatile auto, gasoline and building supply data. It's forecast to rise 0.6% after a 1.7% decline in January.

Estimates for the metric are unusually wide, ranging from -0.3% (Morgan Stanley) to +1.0% (Danske) and the Fed might have added more intrigue.

In his interview aired on Friday (and recorded late last week), Fed Chairman Powell said there is some evidence of a rebound in January retail sales. Of course he could be talking about secondary metrics but he might also have gotten a hint on the data ahead of time. Even if he didn't the Fed gets plenty of data and he may have other reasons to believe a strong number is coming.

Perhaps the best reason for buying something like USD/JPY ahead of the data is that the control group chart looks way out of whack. Maybe it was the shutdown and problems getting the data, maybe it was economic fears after the drop in stocks. But stocks have rebounded and the decline looks far too dramatic when there are no other signs the economy went over a cliff.

Retail sales