Swedish retail sales fall sequentially in October, underlying trend remains weak

Swedish retail sales eased in the month of October. On a sequential basis, retail sales fell 1.1 percent, whereas it dropped 0.1 percent on a year-on-year. The October print is well below expectations.

The figures seem jumpy; however, the underlying trend is subdued. Therefore, it appears as if the wobbly housing market is feeding through to consumption. This is consistent with the historical pattern. Furthermore, consumer sentiment is low.

Household consumption is seen to fall markedly in the third quarter, noted Nordea Bank in a research report. There are some temporary factors at play; however, recent subdued data makes it uncertain how much consumption will recover in the fourth quarter. The Riksbank is expected to probably raises rates in December; however, it is not a done deal, added Nordea Bank.