US TSYS: Extending Lows Prior to Flash PMI Data

Retail sales rose by 6.7% Y/Y in the week ending April 18, a slight slowdown but still keeping month-to-date gains at 6.9%. That's roughly around the same pace as seen the prior 2 months (6.8% in each of Feb and Mar) and suggests that overall retail sales will maintain solid momentum into Q2.  

• The report noted "Some retailers reported weaker year-over-year Easter sales, facing challenging comparisons to last year's pre-Easter shopping week in April. Home improvement and outdoor merchandise sales are increasing as spring begins. Sales of household basics, food, and consumables remain steady. The weather has varied across the country, with some regions experiencing favorable conditions and others facing unseasonal weather. Discount stores have seen higher sales in food and household supplies, supported by ongoing promotions."
• Coming after the morning's official Census Bureau retail sales for March, which handily beat expectations, this was a reminder that while Redbook has portrayed retail activity in a relatively more positive light it has consistently shown solid growth through the early months of 2026 even as the Census series faltered.
• March's 4.8% Y/Y retail Control Group rise was below that of Redbook's 6.8% but was still the strongest in 7 months. All are in nominal terms meaning the inflation-deflated series will have been substantially weaker even excluding gas prices, but either way there is no sign of major slowdown in sales value growth.

OI data points to net short setting as gilt futures sold off on Monday, with OI rising by ~6.1K/~0.5% on the day. Note that the net short cover seen during Friday’s session (~8.2K contracts/~0.7% of OI) was slightly more prominent, leaving OI below Thursday’s closing levels.

• -6,000 TUM6 103-25, sell through 103-25.12 post time bid, DV01 $265,000.
• The 2Y contract trades 103-25.12 last (-3) vs. 103-24.75 low