Euro Zone Retail Sales are expected to decline -2.2% in the year to June, a modest improvement from the previous month’s -3.3% contraction. However, the reading still clearly falls along the down trend that has guided receipts lower since December 2006. Further, a downside surprise is not out of the question considering the unexpectedly dismal German retail sales result [1] for the same period that was revealed earlier this week. Germany is the largest economy in the Euro Zone and lackluster activity there may well drag down region-wide performance. Evaluating the longer-term outlook, any sustained return to growth in retail spending is sure to be marginal at best with the unemployment rate set to hit 9% for the first time in 5 years in 2009 and surpass 10% in 2010 according to European Commission estimates.
Links:
[1] http://www.dailyfx.com/story/market_alerts/fundamental_alert/German_Retail_Sales_Much_Worse_1249280535652.html
[2] http://www.albawaba.com