Yesterday’s February retail sales disappointed, coming in negative at -0.70% instead of an expected slight gain. Private consumption has declined for three months in a row, and this is the key contributor to economic growth. Nonetheless, consumer confidence is firm, unemployment is at historic lows (5.30%) and wage growth accelerated 4.3% in Q4 2017. So we remain confident that private consumption will recover and that retail sales data must be taken with a grain of salt.
The euro continues to appreciate against the USD, currently at 1.2265 and expected to head toward 1.2254 short-term. There’s been an increase of US non-commercial long EUR futures, equivalent to 141’064 or 60% of total long open interest contracts, so expect to see continued pressure on the greenback.
By Vincent Mivelaz