EU Retail Sales Forecast Shows the Potential Impacts on the Eurozone Economy

EU Retail Sales Forecast Shows the Potential Impacts on the Eurozone Economy

Today's retail sales report in the European Union is expected to remain unchanged. In the latest figure available today at 09:00 GMT, with a growth rate of 0.0% following the growth rate of 0.1% observed in the previous month. 

If the forecast is correct, this could feed back into the region's inflationary pressures. If retail sales stay flat, then it might portend relatively weaker demand-which could in turn influence the European Central Bank's relative considerations of monetary policy. Conversely, if the retail sales are higher than anticipated, consumer confidence also rises, and hence inflation will follow. The ECB could do more tightening than what is envisioned.

If the result shows market reactions, there will be volatility in the euro. A retail sales outcome that either does not change or is less than forecasted would weigh the euro down. 

As the data release approaches, the market participants will be very keen on any deviation from the forecast, and in this outcome, economic and monetary policy implications will remain uncertain.

Bowman’s speech may give a glimpse into the Fed’s future plans.

Federal Reserve Governor Michelle Bowman will speak today at 17:00 GMT, and it could drain a lot from the US dollar and the overall market sentiment. Her speech's interpretation can guide market participants with a clue about the Fed's future path for monetary policy. Her speech could be bullish for the USD if she believes that the Fed Reserve will be tilting toward a rate hike at the next FOMC meeting since higher rates usually attract investors toward dollar-denominated assets. If she takes a dovish stance by stating a likely pause or softening of the rate hikes, then the USD would likely be in such a position to suffer from downside pressure. Markets are likely to be volatile as investors are keenly listening to her utterances and trying to measure what she would mean in the Fed's next move in taming inflation and stimulating economic growth.