EZ Retail Sales Unexpectedly Fall

Eurozone retails sales unexpectedly fell 0.4% in March, against expectations of a 0.2% increase. The fall marked the second consecutive month of declines as February saw a revised 0.2% decline, and brought the year over year down to -1.6%- the lowest since 1995. Record food and oil prices have squeezed consumer’s wallets, which saw them buy 2.7% less food, drink and tobacco products. Clothing also fell 2.5% as the higher costs of fueling their gas tanks have forced shoppers to make cuts in other areas. The dour fundamental data won’t be enough to shake the ECB from its current hawkish stance, as President Trichet has recently reiterated his concern over rising global inflation. The central bank is expected to leave rate unchanged tomorrow, but if the committee speaks to mounting downside risks, it may lead to speculation that a rate cut may come by year’s end or early next year and weigh the Euro down further.

DailyFX

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