Timing of Easter boosts March spending

Danske Research Team Danske Bank A/S

Danish card data suggests that spending excluding energy increased 7.0% in March compared to the same month last year. Consumer prices excluding energy increased 1.6% over the same period, meaning that in real terms spending was up 5.3%, which is the highest growth in real spending since April 2022.

The early timing of Easter in March, rather than April like last year, gave a boost to the monthly spending. We will probably see lower y/y growth rate in April, when we will see the opposite effect of only one Easter holiday in April.

Particularly Wednesday before Easter showed record high spending, as it was both the last shopping day before the holiday closures, and a pay day. In grocery stores spending was up 15% compared to Wednesday before Easter in 2023, (which did not coincide with salary payments). The timing of Easter also affected the monthly aggregate in grocery stores, where the March spending was 6.2% higher than same month last year, despite a decline in food prices over the same period.

We saw an even stronger effects from earlier holidays in do-it-yourself stores and cinema spending, which was up 51%. Airlines and travel agency spending weakened, which is probably an effect of the early timing of Easter, but will be worth having an eye, as we have seen a tendency for lower spending growth here for a while now.

Overall households are getting a lending hand from inflation, posting below 1% for two consecutive months now, and wage growth at 5.3% for Q1. This should support spending in 2024.

Download The Full Spending Monitor

Author

Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.