FXStreet (Delhi) – Teunis Brosens, Research Analyst at ING, notes that the recent release of stronger than expected retail sales data of Eurozone is an indicator of the region’s recovery which will further result in dovish stand from the president Draghi in today’s ECB meet.
Key Quotes
“The last Eurozone economic indicator out before the ECB meeting this afternoon is good news for president Draghi. July retail sales beat expectations by rising 0.4%MoM and 2.7%YoY. This shows that at least in July, Eurozone consumers were undeterred by turmoil in Greece and China and continued to steadily increase their outlays.”
“Today’s figures mark a good start for the third quarter, and with both consumer confidence and PMIs improving somewhat in August over July, there is scope for further gains in retail sales ahead. It seems as if the Eurozone economy is temporarily immune to financial turmoil and economic setbacks either close by in Greece or far away in China. The Eurozone economy just continues its recovery, albeit at its typically European, very leisurely pace. For this reason we don’t expect any new fireworks from Frankfurt today.”
“Importantly for the ECB, the latest credit data show that bank lending to businesses has convincingly returned to positive territory — a very welcome development after almost three years of shrinking business credit.”
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