Australian dollar rebuilds as taper tapers

Uh oh, US data is going from bad to worse. Last night we saw a terrible retail sales number (all charts from Calculated Risk):

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $427.8 billion, a decrease of 0.4 percent from the previous month, but 2.6 percent above January 2013. … The November to December 2013 percent change was revised from +0.2 percent to -0.1 percent.

That’s the slowest year on year growth since the GFC. Initial unemployment claims rose again and are forming a little up trend:

In the week ending February 8, the advance figure for seasonally adjusted initial claims was 339,000, an increase of 8,000 from the previous week’s unrevised figure of 331,000. The 4-week moving average was 336,750, an increase of 3,500 from the previous week’s revised average of 333,250.

Calculated Risk also has early reads on January home sales that are weak and yesterday we had MBA weekly mortgage originations showing no new movement since rates peaked:

Mortgage applications decreased 2.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 7, 2014.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.3 percent compared with the previous week. The Refinance Index decreased 0.2 percent from the previous week. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 13 percent lower than the same week one year ago.

Goldman Sachs again slashed its Q1 growth estimates. From Zero Hedge:

BOTTOM LINE: The January retail sales report was a significant disappointment, compounded by negative back revisions. Adverse weather was likely a substantial contributor to the weaker January figures. Separately, jobless claims were roughly in line with expectations. We reduced our Q1 GDP tracking estimate by four-tenths to 1.9%.

It was 3% just three weeks ago.

There was no confusion in markets about what it meant today. Stocks rallied a half percent, bonds yields fell above a percent, gold broke above $1300, the US dollar dropped half a cent, EM currencies jumped and the Aussie recovered half of yesterday’s worthy dump.

I still see the US having a better year than last but today it’s taper taper, my friends, Fed humiliation, and pain for the rest of us!