In May, euro zone retail sales dropped by 0.4% M/M, while only a marginal decline was expected (-0.1% M/M) and the previous figure was downwardly revised from 0.2% M/M to 0.1% M/M. The details show a 0.2% M/M increase in food, drink and tobacco, while non-food products dropped by 0.6% M/M. The decline in non-food products might suggest consumers are cutting back spending ahead of the summer sales season.
The final figure of euro zone services PMI showed an upward revision from 44.5 to 44.7, while the consensus expected an unchanged reading. The German figure was substantially upwardly revised, while the French index showed a downside revision. Compared to the previous month, services PMI dropped marginally (44.8 from 44.7), indicating that the service sector remains under severe pressure.
Other: UK services PMI deteriorates marginally
In the UK, services PMI dropped marginally in June, the first decline in seven months. The headline index fell from 51.7 to 51.6 after rising into expansionary territory in May. Also the breakdown disappointed somewhat as new business fell back below 50. Nevertheless, the slight decline is no surprise after the significant improvement over the previous months.
