investingLive Americas FX news wrap 16 Sep: US retail sales climb ahead of FOMC decision

• Major US stock indices close lower
• “So, what do you think is going to happen after the FOMC meeting?”
• Von Der Leyen: Had call with Trump on strengthening pressure on Russia
• Mark Carney’s first budget as Canadian Prime Minister will be released Nov 4
• Wall Street Journal: The framework for the TikTok deal (still to be approved)
• Crude oil futures settle at $64.52
• Canadian RBC cardholder data shows that the consumer remains resilient
• White House extends deadline to sell TikTok until December 18th
• The US treasury sells $13B of 20 year bonds at a high yield of 4.613%
• European indices fall sharply in trading today
• Atlanta Fed GDP now growth estimate for third-quarter 3.4% versus 3.1% last
• Gold prices extends above $3700 to a new all-time high
• US business inventories for July 0.2% versus 0.2% expected
• NAHB housing market index for September 32 versus 33 estimate
• US August industrial production +0.1% vs -0.1% expected
• Trump says there is a deal on TikTok
• Trump says ‘Fed needs to be independent’ as he signs documents for Miran
• US retail sales for August 0.6% versus 0.2% estimate
• US import prices for August +0.3% vs -0.1% expected
• Canada August CPI inflation 1.9% y/y vs 2.0% expected
• The USD is lower to start the US session with declines vs the EUR and CHF leading
• Canada August housing starts 245.8K vs 277.5K expected
• investingLive European FX news wrap: US dollar eases further, US indices reach new highs

U.S. retail sales rose 0.6% in August, well above the 0.2% expected, with the prior month revised up to 0.6% from 0.5%. Ex-autos, sales gained 0.7% vs 0.4% forecast, while the control group — which feeds directly into GDP — also advanced 0.7% vs 0.4% expected, pointing to solid momentum in consumer spending.

Ex-autos and gas, sales climbed 0.7% vs 0.3% prior, which was revised higher. Category gains included clothing (+1.0%), sporting goods/hobbies (+0.8%), and motor vehicle dealers (+0.5%), though some of the increase may reflect higher import prices.

The strength in retail sales should support GDP tracking estimates. Today, the Atlanta Fed GDPNow tracker for Q3 rose to 3.4% from 3.1%.

While the report is unlikely to alter tomorrow’s FOMC decision with the expectations of a 25 basis point cut in reaction to the weakness in recent jobs data, it could influence the debate among policymakers, particularly with new Fed Governor Miran potentially joining Bowman and Waller in pushing for a larger 50 bp cut (just because) .

The focus tomorrow will be on the decision, the vote, and the expectations for rates going forward. Will the dot plot show 1 or 2 more rate cuts between now and the end of the year? What will the rate path look like in 2026. Of course market will also be interested in what Fed chair Powell has to say. Expectations are that he would prefer to not pre-commit – especially given the stronger retail sales data today and inflation that is still above the 2% target. Nevertheless, if the dissenters push, he may be inclined to allow their voice be heard through his if he feels the need to speak for the committee.

In other economic data today

• Industrial production was not as positive. Industrial production in August edged up 0.1% vs -0.1% expected, with the prior month revised lower to -0.4% from -0.1%. Manufacturing output rose 0.2% vs -0.2% expected, while capacity utilization held steady at 77.4%, in line with forecasts. On a yearly basis, industrial production slowed to +0.87% from +1.27% previously, signaling modest growth but a clear loss of momentum compared to earlier in the year.
• The NAHB housing market index for September came in at 32 vs 33 expected, unchanged from the prior month. Current sales conditions held steady at 34, while buyer traffic slipped to 21 (-1), underscoring persistent weakness in demand. However, future sales expectations rose to 45 (+2), suggesting some optimism ahead of anticipated Fed rate cuts, which the NAHB expects to begin at tomorrow’s meeting.
• U.S. business inventories rose 0.2% in July, matching expectations and the prior month’s pace. Retail inventories ex-autos also increased 0.1%, steady with June. The inventories-to-sales ratio eased to 1.37 from 1.40 a year earlier, indicating slightly leaner stock levels relative to sales compared to last year.

U.S. stocks opened higher with Oracle leading the charge on reports it could play a central role in a TikTok deal. Oracle shares surged to an intraday high of $319.97, but those outsized gains faded, mirroring the broader tech sector. The Nasdaq climbed as much as 48.75 points early on, before momentum reversed, dragging the index to a -40 point session low and ultimately closing down 14.79 points.

Looking at the major indices, all close modestly lower:

• Dow industrial average fell -0.27%
• S&P index fell -0.13%
• NASDAQ index fell -0.07%
• Russell 2000 fell at -0.09%

European shares did not fare as well relatively with the

• German DAX falling -1.77%,
• France’s CAC -1.00%,
• Italy’s FTSE MIB -1.28%, and
• Spain’s Ibex -1.51%.

The U.S. dollar came under broad pressure throughout the session, with several majors hitting significant technical milestones.

• EURUSD surged to fresh year-to-date highs at 1.1864, the strongest level since September 2024. Key close risk lies at 1.1829 (prior swing high), with a more conservative support marker at 1.1788 (July high).

• GBPUSD advanced toward a swing area from June/July between 1.3673–1.36826, though momentum stalled just shy at 1.3671 before easing back to 1.3649.

• USDCHF was the standout mover, dropping -1.07% and breaking the July 1 low at 0.78714, extending losses to the weakest level since 2011. A rebound above that prior low could trigger some short-covering if downside momentum falters.

• AUDUSD climbed into a swing zone at 0.6684–0.6694 and tested an upward sloping trendline near the same region. The pair peaked at 0.66874, dipped to 0.6679, and rebounded into the close.

US yields are trading lower with the shorter end leading the way:

• 2-year yield 3.509%, -2.6 basis points
• 5 year yield 3.588%, -1.2 basis points
• 10 year yield 4.029%, -0.4 basis points
• 30 year yield 4.649%, -0.5 basis points

This article was written by Greg Michalowski at investinglive.com.