Retail Sales Preview (Jul 2020) - 1000BST 3/9/20

BBG : +1.4%m/m; +3.0%y/y; Prev (Jun): +5.7%m/m, +1.3%y/y

• M/M retail sales rebounded sharply in May (+20.3%) after they plunged in Mar and Apr due to the virus.
• The growth rate slowed in Jun to 5.7% and markets look for another deceleration in Jul to 1.4%.
• According to Eurostat, retail trade volumes already returned to pre-covid levels, however, the recent uptick in Covid-19 cases all over Europe bodes ill with future increases in sales.
• Country-level data is in line with expectations looking for a deceleration in sales growth:
• German sales declined by 0.9% in Jul in contrast to markets looking for an uptick, while French household consumption ticked up only marginally following a sharp rise in Jun.
• Germany's consumer confidence fell heading to Sep following 3 consecutive increases, while French consumer sentiment remained unchanged in Aug and Italian household sentiment ticked up only modestly.
• Retail trade and consumer confidence in the EZ remain muted in Aug, according to the European Commission's ESI release
• The flash EZ services PMI noted another decline in employment, while the final mfg PMI showed a sharp reduction of staff numbers.
• The rising fear of unemployment and uncertainty regarding the development of the pandemic in autumn creates a risk for spending going forward.