German retail sales grow year-on-year in October, strong rebound in GDP growth in Q4 unlikely

German retail sales grew year-on-year in October; however, the figures gave confused messages regarding the strength of spending at the beginning of the fourth quarter at the face value. On a year-on-year basis, the retail sales grew 5 percent, coming above the expectations and the strongest since May 2017.

However, this partially reflected two extra working days last month compared with October 2017, which was one of the softest months for sales last year. And, most significantly, on a seasonally adjusted basis, the retail sales continued to disappoint, falling for the fourth straight by 0.3 percent sequentially.

“So, while Germany's retail sales do not always provide the best guide to the national accounts measure of household consumption, these figures add to evidence suggesting that a vigorous rebound in German GDP growth in Q4 is unlikely”, said Daiwa Capital Market Research in a report.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Euro was slightly bearish at -54.4448, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 131.748. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex