The Day at a Glance | February 17 2021

The Top

· January`s retail sales in the United States exceeded estimates (5.3% vs 1.1% e.).

· Japanese exports grew 37.5% in January, boosted by the Chinese recovery.

· 10-year US Treasury Bill reached 1.33%, its highest level since February of 2020; this boosted the dollar.

· The Federal Reserve`s meeting minutes will be made public today.

· Economic indicators: Industrial production data is expected to be published in the US (0.5% e. monthly, January).

Economic environment

Retail sales greatly exceeded analysts` expectations during January as they recorded a 5.3% monthly growth. At an annual rate, retail sales set at 7.43%, a sign that suggests strong recovery in US consumption at the start of 2021. This rise is attributed to the fiscal stimulus approved in December ($600 dollar checks for households at the beginning of January) and a delayed demand effect because of the pandemic; this is the highest monthly rise in retail sales since June, when the first fiscal stimulus also boosted consumption. The largest increase in sales was recorded amongst electronic stores (14.7% monthly), furniture (12%) and e-commerce (11%). The “control group” that eliminates the most volatile components in sales grew a monthly 6% (0.8% e.), a sign of firm expansion in consumption in the US economy. The data has reinforced the expectation of a strong recovery in the United States and backed the upwards trend seen in long term interest rates, which reached their highest levels since the start of the pandemic. Consumption is expected to maintain said growth in the following months with a new 1.9 trillion dollar fiscal package (1,400 dollar checks to households), although its approval is still pending.