Retail sales for August came in considerably lower than expected, and July’s big gain of 0.6% was revised down to a modest 0.3%. Excluding autos and gas, retail sales were down 0.1% against an expected 0.3% gain. The headline number was down 0.2% compared to an expected 0.1% gain.

US bond prices were unchanged after the announcement. The euro is up on the day (from 1.192 at 4:00 a.m. to 1.198 at 8:35), but virtually all the gain occurred before the number came out.

The market’s insouciance in the face of an outsized headline inflation number yesterday and a disappointing retail number today has to do with the market’s estimation of the Fed: with a confusing and contradictory economic picture, the Fed will do as little as possible, the market believes.