|08:30||Retail sales||Small increase overall, held down by lower gasoline prices|
|09:15||Industrial production||Moderate increase overall but core manufacturing may be soft|
|10:00||Business inventories||0.6% rise expected in October|
A sharp decline in gasoline prices is likely to hold down overall retail sales in November. We look for an increase of just 0.1% in total sales, but we expect core sales to be up a solid 0.5%. We expect November industrial production to post a moderate increase, led by gains in mining and motor vehicle parts manufacturing.
The spike in repo rates caused by last week’s unplanned market closing highlighted the very cautious approach to liquidity management that still permeates the financial system. That defensive mindset, obviously, has implications for the ongoing debate over the appropriate size of the supply of reserves.