German Retail Sales Show A Small Rebound

German Retail Sales finally turned positive in March after four consecutive months of contraction but the rebound was slightly less than forecast suggesting that consumer demand in Europe’s largest economy remains lackluster. German Retail Sales rose by 0.8% versus 0.9% eyed to record an annual rise of 2.3%. In quarterly terms sales were down by -1% on Q1 exacerbating the decline of -0.2% in Q4 of last year.

According to economists at Markit,“Sharp rises in the cost of fuel and everyday essentials have reduced spending power at a time when the ongoing euro area crisis is causing an added drag on consumer confidence.” The overall impact on German GDP is likely to be negative in Q1 as consumer demand remains tepid and growth will only come from the export sector.

The EUR/USD say little reaction to the news with the pair remaining relatively bid at 1.3250 on mildly positive risk flows. All eyes will focus on the Spanish GDP numbers due at 7:00 GMT which is expected to show contraction of -0.5% on a quarterly basis and -0.6% on an annual rate comparison.

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