German retail sales for July have come in flat (0.0%) from the month prior amid expectations of -1.5% and a 4.5% (revised down) showing in June. On the annual front retail sales came in at -1.6% missing consensus forecasts of -0.8% and a previous reading of -1.0% was revised down to -2.1%. Despite the beat on a monthly basis the overall picture is bleak with misses on the y/y numbers and downward revisions to June’s figures, the bottom line is that retail sales continue to decline as the economy slows.
The slowdown being experienced on most fronts of the German economy at present is pressing consumers into saving their money and picking their purchases more carefully. This comes in spite of an expected improvement in unemployment numbers, i.e. more people having jobs, later in the day. German’s seem to be putting their job security to one side and remain very concerned about the impact of the European debt crisis on their haven, and the slowing global economy on their export driven locomotive. As a result, domestic demand remains at incredibly weak levels which could hurt German growth further.
The euro was largely unmoved by the release as traders continue to digest the FOMC minutes released late yesterday and focus on global macro events rather than domestic data. As officials around the world scramble to assess the risks posed by another slowdown in global growth and how to combat it direction for the euro is somewhat clouded as many take to the sidelines and adopt a wait-and-see position. For a full Eur/Usd technical outlook click here.
Written by Jonathan Granby, DailyFX Research Team
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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