Eurozone Retail Sales disappoint – Broader economy still 'holding up reasonably well'

Matthew Ryan, CFA Ebury

Yesterday’s Euro Area retail sales print for June was a disappointment. Sales unexpected fell by 0.3% month-on-month (+0.1% consensus), while the annual number eased to 0.7% - the slowest pace of growth in almost two years.

The details of the report were not particularly encouraging either, as the weakness was broad based, rather than confined to one or two categories. Still, we're wary of overreacting to one month's data, especially with the broader run of economic figures holding up reasonably well.

There is no data of note set for release today, so we expect to the euro to take its cue entirely from this afternoon’s US payrolls report.

News of a deal to reopen the Strait of Hormuz could be mildly bullish for the common currency as and when we get it though, as we noted on Wednesday, any upside here could be limited given that a lot of good news already appears to be priced in by markets.

Author

Matthew Ryan, CFA

Ebury

Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.

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