Former UK prime minister David Cameron resigned on Wednesday and Theresa May was named as his replacement. With several pro-Brexit cabinet appointments, she signaled plans for a swift exit from the EU. The leadership change has allayed fears in the financial markets, causing an outflow from the bond market into the stock market.

The Retail Sales report showed June with strong, expectations-beating retail sales—a 0.6% increase from the previous month and 0.7% when excluding flat vehicle sales. Online retailers continued a strong growth streak with a 1.1% gain. Department stores, especially sporting goods and hobbies, were also strong with 0.9% growth. The overall report sends positive signals about the domestic economic outlook: the job market is healthy and consumers are spending.

The Consumer Price Index (CPI) rose 0.2% compared with last month, suggesting that the price pressures higher in the supply chain observed in the last few months have not yet made their way into retail pricing. The Y/Y increase of 1.0% is a slight decline from the 1.1% Y/Y rate of the prior 3 months. Service prices rose 0.3% for the third straight month, offsetting weak commodity pricing gains of only 0.1%. Energy prices rose 1.3% M/M following similar gains in the past 4 months.