Euro area retail sales fall slightly in January

The economic indicators of euro area were of a secondary significance against the backdrop of the Italian election. However, the most notable were January’s retail sales figures, which indicated a further small fall of just 0.1 percent sequentially, after a 1 percent sequential decline in December.

Delving into details, while auto fuel sales rose 0.1 percent sequentially, food sales fell 0.2 percent and non-food category dropped 0.3 percent sequentially. However, on a three-month on a three-month basis, that still left retail sales growth 0.8 percent, the most solid such rate in six months implying that underlying momentum might well be stronger than the volatile headline figures implied.

Indeed, compared to a year ago, the 2.3 percent year-on-year increase matched the average through the second half of 2017, a rate that is nevertheless still below that of overall GDP. Going forward, the outlook for consumer spending in the euro area seems to stay positive, not least given that consumer sentiment continues to be elevated by historical standards, the jobless rate appears set to continue falling, and ongoing firm economic momentum is likely to generate some upward pressure on pay growth, added Daiwa Capital Market Research in a report.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Euro was slightly bullish at 56.0466, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -7.82922. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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