The two lane economy is not just a US thing/Retail earnings comments

This leg of the US dollar rally that took on more pace post election is now mostly vs the euro and it's a clear fundamental and rate differentiation between them and the US. The Eurozone November manufacturing and services PMI fell to 48.1 from 50 with the services component in particular falling to 49.2 from 51.6 and below the estimate of no change. Manufacturing remained weak at 45.2 vs 46 in October and also vs a forecast of no change. 

S&P Global was not kind with its words saying "Things could hardly have turned out much worse. The Eurozone's manufacturing sector is sinking deeper into recession and now the services sector is starting to struggle after two months of marginal growth. It is no surprise really, given the political mess in the biggest Eurozone economies lately - France's government is on shaky ground, and Germany's heading for early elections. Throw in the election of Donald Trump as US president, and it is no wonder the economy is facing challenges. Businesses are just navigating by sight."

That said, the weakness is mostly with their two biggest economies as "the rest of the Eurozone continued to see business activity increase, albeit the rate of expansion was only slight and the slowest in the current 11 month sequence of growth."

And some more, "The environment in November is stagflationary. On one hand, activity is declining across the board, while on the other, input and output prices are rising more quickly. This surge is driven by services costs, which ties in with the sharp rise in wages in the Eurozone in the third quarter. Service sector selling price inflation is a major headache for the ECB."

On this point about the ECB, whose sole mandate is inflation and keeping its rate of change around 2%, they seem to now just be focused on the growth side as expectations grow for them to cut its deposit rate by 50 bps next month. The swaps market is pricing in a 100% chance that they cut 25 bps and a 50% chance they do so by 50 bps next month. 

So, in response, the euro is now at a 2 yr low vs the US dollar for both growth and rate differential reasons. Bond yields are falling too after the data release while stocks are lower.