THE TAKEAWAY: USD Personal Income (OCT) > 0.0% versus +0.2% expected, from +0.4% (m/m) > USD Personal Spending (OCT) > -0.2% versus 0.0% expected, from +0.8% > USD/JPY BEARISH
As more data comes in from October, it appears that Hurricane Sandy, the superstorm that derailed any sort of economic activity in the Northeastern United States in late-October, had a negative material impact on the US consumer. Personal Income was flat from the prior month, just below the expected +0.2% month-over-month reading, but Personal Spending contracted by -0.2% m/m, a poor sign for the US economy.
Whether or not these are new trends or one-off occurrences remains to be seen; certainly, the rise in the US Savings Rate, from 3.3% to 3.4% in October, is a positive sign, but it doesn’t appear to be organic. In other words, the US consumer would likely have continued their pace of higher consumption and lower savings; these weak figures are probably just a one-time occurrence.
USD/JPY 1-minute Chart: November 30, 2012
Charts Created using Marketscope – Prepared by Christopher Vecchio
Following the releases, the USD/JPY initially dropped slightly, trading from 82.62 to 82.56 shortly after. However, at the time this report was written, price had recovered to 82.67. Were these data interpreted as more than a one-time occurrence, it would have likely resulted in continuation lower rather than a bounce back higher. Nevertheless, we note that these are 1-minute prints and thus should be taken with a grain of salt.
--- Written by Christopher Vecchio, Currency Analyst
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