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Posted September 15, 2025 at 12:48 pm
Tomorrow’s retail sales report is expected to arrive at 0.3% month over month (m/m) and our prediction market is marginally tilted toward a lighter number. This modest discrepancy in opinions can be seen by participants opining that the 0.25% threshold won’t be breached to the upside with a 51% degree of confidence. My projection is quite buoyant at 0.6%, however, following last Friday’s strong growth of 0.5% reported from the National Retail Federation together with CNBC, which correlates somewhat with the government’s print due tomorrow. In light of the aforementioned, I don’t think a huge miss is in the cards but a significant beat may be. Against this backdrop, I like the risk-reward profiles of the “Yes” contracts ranging for -1.75% and -0.25% which span from $0.97, $0.96, $0.88 and $0.67. The “Nos” at 1.25% and 1.75% also look safe to me at $0.83 and $0.95, as a result of that magnitude is unlikely, occurring just once since February 2023.
Tomorrow’s median expectation for industrial production is at 0.8% year over year (y/y), but our prediction market is a little higher with 49% of participants pointing to a number north of 1%. I’m in-line with the consensus here and don’t think a huge beat or miss is in the cards for this print, which historical carries a light deviation rate from the consensus. Against this backdrop I like the risk-reward profiles or the “Yeses” at -1%, -0.5% and 0% as well as the “Nos” at 2%, 2.5% and 3%. The contracts range from $0.85 to $0.98 in cost and have a wide path to profitability in my view.
Our prediction market is expecting a miss in tomorrow’s Canada CPI which carries a median expectation of 2% y/y. But the “No” at 1.8% is costing just $0.64, implying that 64% of our participants don’t expect the number to exceed that level. Meanwhile, a Reuters poll of 17 forecasters ranges from 1.8% and 2.1% in their projections. Against this backdrop, I like the risk-reward profiles of the “Yes” contracts at the 1%, 1.2%, 1.4% and 1.6% thresholds which cost between $0.75 and $0.97. A result at 1.7% or higher, meaningfully beneath the consensus estimate, will deliver a profit to “Yes” investors here.
Source for Images: ForecastEx
Note: Prices are highest bids as of the morning of September 15, 2025. Red circles around the thresholds were inserted by J. Torres to highlight his preferred “Yes and No” answers throughout different levels.
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This material is from IBKR Macroeconomics, an affiliate of Interactive Brokers LLC, and is being posted with its permission. The views expressed in this material are solely those of the author and/or IBKR Macroeconomics and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Interactive Brokers LLC is a CFTC-registered Futures Commission Merchant and a clearing member and affiliate of ForecastEx LLC (“ForecastEx”). ForecastEx is a CFTC-registered Designated Contract Market and Derivatives Clearing Organization. Interactive Brokers LLC provides access to ForecastEx forecast contracts for eligible customers. Interactive Brokers LLC does not make recommendations with respect to any products available on its platform, including those offered by ForecastEx.
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