NAB Morning Call Weak retail sales ahead of payrolls
Feb 10, 2026
Ken Crompton, NAB markets economist who parses macro data, interest rates and FX. He breaks down why flat US retail sales pushed Treasury yields lower and raised Fed cut odds. He explains the yen’s sudden strength and what softer Australian business and building data might mean for the RBA.
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Falling Yields Signal Softer Growth Expectations
- US Treasury yields fell notably after flat retail sales, signalling softer growth expectations.
- Markets priced only a small increase in the chance of a Fed cut by June despite lower yields.
Broad Retail Weakness Undermines Consumer Momentum
- Broad weakness in US retail sales (autos, discretionary food) points to subdued consumer demand.
- That downside helps explain lower yields and supports the view inflation pressures are easing.
Labour Costs Cooling But Payrolls Will Tell
- Employment cost growth cooled a touch, and import/export price growth slowed, consistent with easing inflation.
- Non‑farm payrolls and the unemployment rate will be crucial to gauge whether labour still tightens or softens further.