Eurozone Retail Sales Fall 0.7% in September, Worse Than Expected

what happened

Retail sales volumes in the eurozone fell 0.7% month on month in September, after a 0.4% rise in August, the European Union's statistics office Eurostat said. It was the largest decline since June 2024 and fell well short of the flat reading economists polled by The Wall Street Journal had expected. A sharp drop in Germany was the main drag.

Consumer confidence is weakening under the weight of expensive energy: global oil climbed back above $100 a barrel in September as the conflict in the Middle East escalated. Inflation in the eurozone reached 4% last month, double the European Central Bank's target. According to Dow Jones Newswires and Update, the ECB held its key rate last week, but markets increasingly expect a third hike since the Iran war began, possibly in December.

why it matters

Weak spending and higher borrowing costs together squeeze household budgets and growth in the region, adding uncertainty for the euro and European equities. A December hike would support the currency but raise risks to domestic demand.

market impact

Euro: weak data and growth risks pull the currency down, while hike expectations support it

• ↔EUR/USD mixed — weak demand pulls it down, while expectations of ECB tightening support the euro
• ▼Euro Stoxx 50 pressure down — weaker consumer spending and higher financing costs weigh on equities

tags

instruments