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Eurozone Retail Sales Fall in July on France And Italy

Retail sales in the eurozone fell in July as France and Italy both saw accelerated contractions in trade, the latest PMI® figures from Markit showed. The fall in retail sales in the euro area was the most marked since May 2013 despite further, albeit slower, growth recorded in the currency bloc’s largest economy, Germany.

At 47.6, down from a neutral reading of 50.0 in June, the headline Markit Eurozone Retail PMI – which tracks month-on-month changes in like-for-like retail sales – pointed to a solid decrease in eurozone retail sales at the start of the third quarter. July’s survey also showed that sales were sharply down on the year, with the annual rate of decline the fastest in 14 months.

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imageUnderlying July’s decrease in eurozone retail sales were faster contractions in trade in both Italy and France. The former posted its most marked monthly decrease in like-for-like sales since February, having seen the pace of decline accelerate every month since May. France’s decrease in sales was the sharpest since May 2013 and the second in as many months. German retail sales on the other hand continued to grow, albeit at a much reduced rate compared with June’s near
three-and-a-half year high.

Despite this renewed weakness, employment among eurozone retailers rose fractionally (on average) for the second month in a row. Indeed, the rate of job creation at German retailers was little changed from the solid pace seen in June, which was sufficient to offset further modest job losses in both France and Italy.

The level of spending among eurozone retailers on items for resale dipped for the second time in three months in July, having been stable during June. Stock levels rose nevertheless, the accumulation a reflection of sales having been lower than expected. Moreover, the shortfall in sales was the most marked since March 2013.
Cost pressures faced by retailers remained mild in the context of historical data, with wholesale price inflation running below the long-run series average having dipped in July. Details suggested that falling buying levels among French and Italian retailers weighed on the pricing power of their suppliers.

July’s survey meanwhile highlighted a pessimistic outlook among retailers regarding their future performance, with sentiment the most negative for a year.

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NEW$ & VIEW$ (5 AUGUST 2014)

COMPOSITE PMIs

Time constraints prevent me from posting the important Markit Composite PMIs this morning. Here are the links to the pdfs if you care. I will post them separately tomorrow.

Fed Survey: Mortgage Standards Ease for First Time Since Housing Bust

Nearly one in four U.S. banks said they had eased mortgage-lending standards for borrowers with strong credit during the second quarter, the largest such movement by lenders since the housing bust hit nearly eight years ago.

As well, the Federal Reserve’s quarterly survey of banks’ senior loan officers showed that nearly half of large banks and foreign institutions believed lending standards for riskier syndicated loans to companies with noninvestment-grade, or junk, credit ratings were easier than the post-2005 norm. (…)

The survey showed that lenders continued to ease standards on loans to businesses “amid a broad-based pickup in loan demand.” It also showed that more banks signaled easier standards for commercial real-estate loans than had been the norm since 2005. (…)

Euro-Zone Retail Sales Pick Up

The European Union’s statistics agency said euro-zone retail sales were up 0.4% from May. It also raised its estimate for that month. Eurostat previously estimated sales were flat in May, but now reckons they rose by 0.3%. Compared with June 2013, sales were 2.4% higher, the largest year-to-year rise since March 2007.

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E.U. retail sales volume was up 0.8% (3.2% a.r.) in Q2, after +1.0% (4.1%) in Q1. Core sales: +0.4% in Q2  (1.6% a.r.) after +1.3% (+5.3%).

Moody’s Says France Likely to Miss Deficit Target

(…) The ratings firm said in a statement that there are “significant implementation risks” to France’s plan to reduce spending by 50 billion euro ($67.1 billion) over three years because many of the measures still haven’t been defined.

Moody’s also noted there is a challenging political environment—around 40 of President François Hollande’s own Socialist majority abstained from voting on the spending cut plan in the Spring—and said growth is weaker than expected.

“While the deficit will remain on a declining trend, the country is likely to miss its fiscal targets in 2014 and 2015,” Moody’s said in a statement. France aims to bring the deficit down to 3.8% of economic output this year and 3% next year from 4.3% in 2013. (…)

Stock Market Sentiment & Technical Indicators – Dr. Ed Yardeni

Lots of good charts in there. Like these:image

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PUTIN’S RUSSIA

The New Yorker has a longish but interesting article if you care about Russia. It starts slowly but gets better: Watching the Eclipse

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