TD Securities’ Global Strategy Team expects US retail sales for March to rise 1.7% month on month, compared with a 1.4% consensus forecast. It links the increase mainly to higher petrol prices and notes a likely sideways move in auto sales.
The team expects the retail sales control group to rise 0.6% month on month, versus a 0.2% consensus forecast. It adds that core goods inflation may also support the headline figure.
Retail Sales Services And Event Risks
Food services sales, the only services category in the report, are estimated to increase 0.7%. The release is due in the morning and is being watched alongside other event risks.
Markets are also focused on Kevin Warsh’s Senate Banking Committee hearing for his nomination as Fed Chair. His prepared remarks defend Fed independence and take a hawkish tone on inflation, with rates and balance sheet policy under review.
Middle East developments are also being monitored, including negotiations starting in Pakistan. On Monday, rates bear flattened after the Strait was closed again over the weekend, while equities were only modestly lower.
Looking back at the situation in March 2025, we saw how unexpectedly strong retail sales, fueled by high gas prices, signaled persistent inflation and a hot economy. This pattern is reminiscent of March 2022, when retail sales were boosted by an 8.9% monthly surge in gasoline station receipts alone. Given this, we should consider using options on retail ETFs, like the XRT, to hedge against similar inflation-driven surprises in the economic data for the coming months.
Hedging Rate And Geopolitical Surprise Risk
The market’s focus on a hawkish Fed nominee and the resulting bear flattening of the yield curve in 2025 was a textbook signal of impending rate hikes. As of April 2026, the CME FedWatch Tool indicates markets are pricing in a period of rate stability, which could make the market vulnerable to hawkish surprises. We should therefore watch for opportunities in interest rate futures, such as SOFR contracts, to position for potential shifts in Fed policy communicated in upcoming speeches.
The sudden closure of the Strait over a weekend last year underscores how geopolitical events create immediate volatility, a lesson reinforced by the Red Sea shipping disruptions that began in late 2023. These events cause spikes in energy costs, which directly impacts inflation and corporate earnings. Therefore, holding call options on crude oil futures or major energy sector ETFs provides a direct hedge against these unpredictable supply shocks in the coming weeks.
