US DATA: Johnson Redbook Sales Continue To Point To Slowing Retail
The Johnson Redbook retail sales index rose by 4.5% Y/Y in the week ending Jun 21, a slowdown from 5.2% the prior week and bringing month-to-date June sales gains to 4.8% Y/Y (vs a 5.7% gain targeted by retailers).
- The report anecdotes suggest that some of the softness may have been weather related though point out that sales could pick up ahead of the 4th of July holidays (note June is a "5-week" month for the purposes of this index, ending Jul 5): "Retailers reported a softer performance following Father's Day and fell below plan on a month-to-date basis. The official start of summer was on Friday, June 20th, bringing hot weather across much of the country, leading to more people enjoying outdoor activities instead of shopping in stores. Warehouse and discount stores focused more on household essentials and consumables, with less emphasis on summer apparel and other soft goods. In response to competition from Amazon's Prime Day, major retailers announced various sales events, offering early access, extended durations, and lower prices. Sales performance is expected to improve as we approach the Fourth of July, with retailers beginning their Independence Day promotions."
- As it stands, June would be the slowest month for Redbook gains since January and well down from 6.7% in April, in line with the broad slowdown - but not sharp drop - in retail sales activity more broadly. That said, activity looks fairly consistent with where it has been for most of the last year prior to the (arguably tariff-front-running-related) jump in March/April which is now being reversed.
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JGB TECHS: (M5) Rallies off Lows
- RES 3: 147.74 - High Jan 15 and bull trigger (cont)
- RES 2: 146.53 - High Aug 6
- RES 1: 141.48/142.95 - High May 2 / High Apr 7
- PRICE: 139.40 @ 15:42 GMT May 23
- SUP 1: 138.54 - Low May 22
- SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
- SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
JGBs have rallied off recent lows and for now, however a bearish theme remains intact following the reversal that started Apr 7. A continuation lower would signal scope for an extension towards 136.57, a Fibonacci projection. On the upside, a reversal higher would instead refocus attention on 142.95, the Apr 7 high. The first important resistance to watch is 141.48, the May 2 high. A break of this level would be viewed as an early bullish signal.
US FISCAL: Total Tariff Income Jumping In May As New Rates Hit
Treasury reported a record $16.5B in customs/excise taxes on May 22, reflecting the large increase in tariff rates that went into effect in April.
- Today's report is important because it represents the largest tariff collections of the month which are typically on a due date around the 22nd, when most corporate importers make their payments.
- Thursday's one-day collection is a record, and the month has already set a new record. Tariff revenues have totaled $22.3B so far in May, and are came in at $17.4B in April (after averaging $8.1B/month in 2024).
- For the fiscal year as a whole so far, customs duties have totaled just under $93B, per the Treasury Daily Statement.
US FISCAL: Extraordinary Measures Continue To Dissipate Alongside Treasury Cash
Treasury's latest estimate of the size of "extraordinary measures" available to use "in order to prevent the United States from defaulting on its obligations as Congress deliberate[s] on increasing the debt limit" is down to $67B on May 21 (of an available $299B), vs $82B a week earlier.
- The amount hit the 2nd lowest level since the debt limit impasse started, at $46B, on May 20 (the low was $34B on Feb 24).
- With $476B in cash in the Treasury General Account on May 21, that left the total resources available to Treasury at $543B, the least since April 14 - the day before the annual April 15 tax deadline.
- Treasury Sec Bessent warned Congress earlier this month that "there is a reasonable probability that the federal government's cash and extraordinary measures will be exhausted in August while Congress is scheduled to be in recess. Therefore, I respectfully urge Congress to increase or suspend the debt limit by mid-July".
