Retail sales in the eurozone rose 0.1% in July, after the decline they experienced in June. The euro appreciated as much as 1.11 against the dollar, boosted by speculation about a rate cut by the US Federal Reserve ahead of Friday’s jobs report.
Las retail sales in the eurozone rose a modest 0.1% in July 2024, recovering from a 0.4% decline in June, according to data published by Eurostat on Thursday. This timid increase is in line with economists’ forecasts and reflects the slow recovery of the region. In the European Union as a whole, retail sales increased 0.2% in July, also reversing the 0.4% decline of the previous month.
In year-on-year terms, the retail sales index fell by 0.1% in the eurozone, highlighting the persistent problems facing consumer spending across the currency bloc. In contrast, the European Union recorded a 0.4% annual increase in retail trade volume.
Sectoral breakdown and situation in Member States
Regarding sectoral results, in July there were mixed results in the different categories of the euro zone. The sales of food, beverages and tobacco increased by 0.4%, while non-food productsexcluding automobile fuel, recorded an increase of 0.1%. However, sales of combustible Automotive sales in specialized stores fell 1.0%.
In the whole of the European Union were observed similar trends: Sales of food, beverages and tobacco rose 0.5%, sales of non-food products (excluding auto fuel) rose 0.2% and sales of auto fuel fell 1.4% in specialty retailers .
Among the Member States for which data were available, Croatia registered the highest monthly growth of retail trade volume, with an increase of 2.9%. They followed him Austria y Slovakiaboth with a growth of 1.8%, and Sloveniawith an increase of 1.6%. At the other end of the spectrum, Luxembourg experienced the sharpest decline, with a drop of 2.1%, followed by Romania (-1,8%) y Chipre (-1,1%).
Market reactions
The euro remained firm at 1.11 against the dollar US, with a rise of 0.2% on Thursday, reaching levels last seen in late August. This strengthening of the single currency came as traders increased bets on an interest rate cut by the Federal Reservewith the market’s attention focused on the next US employment report, scheduled for Friday.
They have intensified speculations around the magnitude of the possible rate drop. According to the ‘FedWatch’ tool of the CME (an American financial markets company), the probability of a cut of 50 basis points during the Federal Reserve meeting on September 18 is now 41%, up from 34% the previous week.
The data of employment Friday’s U.S. data are seen as critical as weaker-than-expected job growth and a new increase in unemployment rate compared to July could fuel expectations of a further rate cut.
In the fixed income marketsEuropean sovereign debt yields remained relatively stable. Bund performance German 10-year bond remained stable at 2.22%, while the spread between BTP Italians and the Bunds fell by 3 basis points, to 1.37 percentage points. For its part, the spread between Spanish bonds and bunds remained unchanged at 0.82 percentage points.
Los equity markets Europeans recorded a behavior moderate after Wednesday’s sales. The Euro Stoxx 50 index was down 0.2% at 11:15 a.m. CET. The values French y dutch recorded slight losses, while Italy and Germany recorded marginal gains. The Spanish Ibex-35 index outperformed its peers and rose 0.5% thanks to gains in its banking sector.
Among large-cap stocks, the Dutch equipment manufacturer semiconductors ASML continued its downward trendwith a drop of 1.8% after Wednesday’s sharp decline of 5.9%, caused by the UBS rating downgrade. Other lagging stocks included French luxury giant LVMH, which fell 1.8%, as well as Air Liquide and Essilor, which fell 1.9% and 1.6%, respectively.
On the contrary, the utility values They were the most notable within the Euro Stoxx 50 index. The German RWE rose more than 1%. Germany’s RWE rose 3.8%, while France’s ENGIE rose 1.8%.
