Retail sales boost the Pound
Some positive news as retail sales exceeded expectations in May. The volume of retail sales grew by 2.1% between April and May, much stronger than market forecasts. Much of the improvement was driven by a rebound in food sales after the winter months.
In the Eurozone, the composite PMI reading rose to a fifteen month high in June as the pace of contraction eased in both the manufacturing and services sectors. This is the third consecutive monthly improvement in the survey.
More signs of recovery in the US as sales of previously owned homes rather than new build jumped to their highest level since November 2009. Purchases of existing homes increased to an annualised rate of 5.18 million in May, up from 4.97 million in the previous month.
We’re seeing a decline in growth in China with a reduction in both production and demand as the June PMI reading slipped to a nine month low of 48.3, down from 49.2 in the previous month.
The new exports component slipped to its lowest level since March 2009, while employment also softened to a ten month low.
The positive UK retail sales figures drove a recovery in Sterling with GBP/USD reaching a high of $1.5517 while GBP/EUR rose to €1.1740.