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4 Mar 2015
Strong Eurozone retail sales point to higher consumption – ING
FXStreet (Barcelona) - The improving Eurozone flash PMIs (3.7% yoy) sets the stage for further gains in consumption in 1Q, and suggests the economic growth will pick up this year, notes Teunis Brosens of ING, as he reviews the Euro-area retail sales data release.
Key Quotes
“Improving sentiment among Eurozone consumers is now clearly translating into higher spending. January retail sales rose 1.1%MoM, registering the fourth consecutive month of healthy growth. Sales in the 19-country bloc were up a very respectable 3.7% compared to a year ago.”
“Looking at the major euro area countries, the Germans appear to be enjoying a shopping spree, with retail sales volumes up 2.9%MoM and 5.4%YoY. French retail sales in contrast were sluggish in January, up only 0.1%MoM. The more favourable YoY-figure of 4.1% is flattered by base effects.”
“Eurozone retail sales started 2015 on a positive note. Low oil prices helped, but sales of non-fuel items were up too.”
“The further improvement of the flash retail PMI in February suggests that the positive trend continued in the first weeks of February. This sets the stage for further gains in consumption in the first quarter.”
“Indeed we expect economic growth to gradually pick up further this year.”
“This does not mean however that the ECB could just as well cancel QE at its meeting tomorrow. The European economic recovery is still very modest, fragile and uneven. Moreover, deflationary risks have not receded yet.”
“We do expect Draghi to present upward revisions to the ECB’s growth forecasts tomorrow, but that should not deter him from going ahead with QE as planned.”
Key Quotes
“Improving sentiment among Eurozone consumers is now clearly translating into higher spending. January retail sales rose 1.1%MoM, registering the fourth consecutive month of healthy growth. Sales in the 19-country bloc were up a very respectable 3.7% compared to a year ago.”
“Looking at the major euro area countries, the Germans appear to be enjoying a shopping spree, with retail sales volumes up 2.9%MoM and 5.4%YoY. French retail sales in contrast were sluggish in January, up only 0.1%MoM. The more favourable YoY-figure of 4.1% is flattered by base effects.”
“Eurozone retail sales started 2015 on a positive note. Low oil prices helped, but sales of non-fuel items were up too.”
“The further improvement of the flash retail PMI in February suggests that the positive trend continued in the first weeks of February. This sets the stage for further gains in consumption in the first quarter.”
“Indeed we expect economic growth to gradually pick up further this year.”
“This does not mean however that the ECB could just as well cancel QE at its meeting tomorrow. The European economic recovery is still very modest, fragile and uneven. Moreover, deflationary risks have not receded yet.”
“We do expect Draghi to present upward revisions to the ECB’s growth forecasts tomorrow, but that should not deter him from going ahead with QE as planned.”