EMU:
German industrial production for September came out at the weaker side of expectations. Indeed, production fell 0.3% M/M, to be up 6.1% Y/Y. It follows a strong, albeit downward revised, 1.4% M/M rise in August and only the second monthly decrease in 6 months. Previous months were revised higher. Q3 production rose a very strong 2% Q/Q following a 2.5% Q/Q increase in Q2. The ongoing strength in Q3 bodes very well for Q3 GDP that should be strong too.
The EMU retail PMI index rose in October to 52.8 from 52.4 previous. The index is off its cycle peak of 56.3 reached in May. Overall, the report points to ongoing moderate retail sales growth. The price component remained at the record high of 59.9. Interestingly the German retail PMI rose more strongly and the report suggests the effect of bringing forward purchases ahead of the VAT increase. However, we don’t pay too much attention to this indicator.
EU-12 retail sales for September disappointed, as they fell 0.6% M/M, to be up 1.4% Y/Y. The 0.7% M/M increase in August was revised to 0.5% M/M.
OTHER NEWS: UK RETAIL SALES KEEP UP WELL
In contrast to the plunge in the sales balance of the CBI distributive trades report, the BRC retail sales monitor showed like-for-like sales increasing from 2.4% Y/Y in September to 2.6% Y/Y in October. The three-month trend rate however slowed slightly from 2.7% to 2.5%. All in all, the report suggests that retail sales are keeping up well, despite August rate hike.
