Eurozone retail sales point to growth acceleration in 4Q - ING

FXStreet (Barcelona) - Teunis Brosens of ING, comments that the eurozone retail sales data suggests that it was the best quarter for retail sales since 2006, thanks to cheap oil, and looking at past form, the strong retail sales bodes well for the 4Q 14 GDP for the euro region.

Key Quotes

“Cheap oil is delivering a boost to the Eurozone economy, and we are finally seeing the hard evidence for it. December retail sales rose by 0.3% MoM. That may not be breathtaking, but together with strong performances in the two months before, 4Q14 shows the strongest retail sales growth since 2006 with a rise of 0.8% QoQ.”

“Monthly gains in retail sales were broadly based, with food, fuel and non-food sales all registering higher volumes.”

“The non-food sector, especially, seems to be taking advantage of higher consumer purchasing power. In year-on-year terms, non-food sales volumes are up 3.5%.”

“Looking at the major euro area countries, Spain and Germany stand out, with retail sales volumes up 6.6% YoY and 4.0% YoY, respectively. French retail sales disappointed, gaining only 1.5% YoY.”

“The strong retail sales quarter bodes well for Eurozone economic growth in 4Q14, due out next Friday.”

“On past form, retail sales are consistent with Eurozone consumption contributing 0.4% to quarterly GDP growth in the fourth quarter, up from a 0.25% contribution in 3Q14.”