Euro area retail sales rise above expectations sequentially in November

Euro area’s consumer spending has increased consistently at a softer pace than GDP in the past couple of years, most recently in the third quarter rising only 0.1 percent, the least in over four years, as retail sales growth came to a halt, noted Daiwa Capital Market Research in a report.

Nevertheless, looking at today’s data, private consumption accelerated in the fourth quarter of 2018. Especially, retail sales rose 0.6 percent sequentially in November for the second straight month to take the average level in the initial two months of fourth quarter.

Spending on food dropped 0.9 percent sequentially, the most since July. Spending on core items rose 1.2 percent, whereas spending on fuel rose at the same pace, which represented the biggest rise in over two years.

Among the member states, Germany drove sales growth, where they expanded 1.4 percent sequentially against the backdrop of still-elevated consumer sentiment and record-low unemployment. However, sales in France decelerated considerably, rising only 0.1 percent. Given the disruption caused by the Gilets Jaunes protests, they are expected to have fallen in December.

“Nevertheless, thanks to a strong showing in October, French retail sales - like those in Germany and the euro area as a whole - remain on track for growth over Q4 as a whole”, added Daiwa Capital Market Research.

At 18:00 GMT the FxWirePro's Hourly Strength Index of Euro was neutral at 8.152, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -99.6297. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex