Release Explanation: The CBI Realized Sales measures the consumer spending. It is a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. A reading above 0 indicates higher sales volume, below 0 indicates weaker sales.
Trade Desk Thoughts: Following an unexpected rise last month, the CBI index has resumed its downward path. In March, the CBI survey fell to -44, pointing out that retail sales have contracted for the last eleven months.
The CBI survey showed that retail sales contracted for the tenth month in a row. In its latest Distributive Trades Survey, 19% of retailers said year-on-year sales volumes rose in the first half of March, while 63% said they were down.
The resulting balance of -44% was worse than retailers had predicted (-33%), and marked a return to the heavy falls seen in the three months prior to February’s less severe rate of deterioration (-25%).
Unfortunately, retailers do not foresee an improvement in April, when sales volumes are expected to fall at a similar rate (-42%).
Forex Technical Reaction: The pound plunged 60 pips just a few minutes before the release, and dropped another 30 pips shortly after. Since the new trading day started, the pound has lost 150 pips.