Euro area retail sales rise in February, household consumption likely grew at faster rate in Q1

Retail sales in the euro area rose for the second straight month in February. Today’s data implied that consumers continued to underpin economic growth in the first quarter of the year. Sales rose by a stronger-than-expected 0.4 percent sequentially, after growth of 0.9 percent rise in the prior month. On a year-on-year basis, retail sales rose 2.8 percent, the strongest annual rate since November 2017.

Spending on fuel dropped 0.7 percent sequentially, while good sales grew modestly by 0.1 percent. Therefore, the rebound in February principally reflected a rise in spending on ‘core’ items. Stripping foods and energy, retail sales rose 0.9 percent sequentially in the month after a growth of 1.6 percent in the prior month. On average, the rate is 1 percent higher than the average in the fourth quarter.

“And so, with consumer confidence having risen for a third successive month in March, household consumption in Q1 likely grew at a faster pace than the rate of 0.2 percent Q/Q in Q4”, said Daiwa Capital Market Research in a report.

At 17:00 GMT the FxWirePro's Hourly Strength Index of Euro was slightly bullish at 62.5988 while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -9.10432 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex