POWER: EdF Cuts St Laurent 1, Paluel 3 Output on Strike

Retail sales remain on pace to post a joint 8-month high growth pace in December, per the Johnson Redbook Retail Sales Index which rose 7.2% in the week ending Dec 20 (6.2% prior). This brought month-to-date gains to 6.4% (retailers target a 6.5% rise), which would be a pickup from the 6.2% month-to-date pace through the prior week (and match November's 6.4% gain).

• While like most retail sales series this is in nominal terms, it suggests continued strong control group sales through year-end (after Q3's real goods consumption growth of 3.1% Q/Q SAAR).
• The report notes in its usual anecdotal session that some shopping could be pushed into the post-Dec 25 period. "As the first day of winter set in, many braved the cold and the crowds on Super Saturday to finish shopping on the final weekend before Christmas. Shoppers scrambled to stores for last-minute shopping and took advantage of deep discounts. With the clock ticking on the number of Christmas shopping days left, gift cards and cash are the last resort for last-minute shoppers. This could push some shopping into the period after the holiday, as gift card sales don’t record revenue until the cards are redeemed, and most gift cards no longer have an expiration date."

FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.64% (+0.00), volume: $87B
• Daily Overnight Bank Funding Rate: 3.64% (+0.00), volume: $171B

Repo Reference Rates - from earlier:

• Secured Overnight Financing Rate (SOFR): 3.68% (+0.02), volume: $3.253T
• Broad General Collateral Rate (BGCR): 3.66% (+0.03), volume: $1.326T
• Tri-Party General Collateral Rate (TCR): 3.66% (+0.03), volume: $1.292T
• (rate, volume levels reflect prior session)

Contained hawkish repricing on the back of the much-firmer than-expected GDP & headline PCE data, adding to the modest hawkish reaction that followed the weekly ADP employment release. Major short end metrics stick within recent ranges.

• 55bp of easing now priced into Fed Funds futures across ’26 vs. 58.5bp pre-data.
• In terms of market views around the next rate cut, ~19bp of easing is priced through April, with 32bp showing through May. That compares to 22bp and 35bp ahead of the data.
• SOFR futures now -0.5 to -4.0 on the day. SOFR-implied terminal rate pricing 3.16% vs. 3.11% heading into ADP.
• Looking closer at the data, consumption and net exports provide the most meaningful contribution the GDP beat, and there weren’t any major caveats, making for a strong overall reading.