Euro Zone Retail Sales Fall, Private Sector Activity Declines

Arthi Gupta
05 Dec, 2012
New York City

Euro zone retail sales decreased in October and private sector activity downturn continued in November. The UK service sector activity dipped in November. The Spanish Treasury raised

[R]2:00 PM Frankfurt – Euro zone retail sales decreased in October and private sector activity downturn continued in November. The UK service sector activity dipped in November. The Spanish Treasury raised €4.25 billion from a bond auction and industrial production declined 3.3%.[/R]

The European indexes traded higher and service sector index fell in UK, Germany and Italy but rose in France. Retail sales in the euro zone declined in October after rising in September.

The troika granted Greece an additional two years to meet its budget deficit target, paving the path to release the next tranche of bailout funds on Dec 13.

European leaders remained divided in setting up common banking supervisory authority across the euro zone.

In Paris trading, the CAC-40 Index rose 10.44 or 0.3% to 3,590.80 and in Frankfurt the DAX Index edged higher 19.24 or 0.3% to 7,454.47.

The yields on Spain’s benchmark were at 5.36%. Italian 10-year yields were at 4.45%.

Euro Zone Retail Sales Fall

Euro zone retail sales on a monthly comparison decreased 1.2% in October following a 0.6% drop in September, Eurostat said today.

Sale of food products slipped 0.8% and non-food sales decreased 1.4% in October. Annually, retail sales declined 3.6% in October, following a 1.6% fall in September.

Separately, the euro zone private sector activity downturn continued in November, according to a survey released by Markit Economics.

The Markit Eurozone PMI Composite Output Index rose to 46.5 in November from the 40-month low of 45.7 in October and above the earlier flash estimate of 45.8.

The Markit Eurozone Services Business Activity Index rose to a three-month high of 46.7 in November from the 39-month low of 46 in October and above the earlier flash estimate of 45.7.

UK Service Sector Dips

The UK service sector registered little change in business activity during November as new orders fell slightly for the first time in nearly two years, data from a survey by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) showed.

The seasonally adjusted purchasing managers'' index for the service sector dropped to 50.2 in November from 50.6 in October.

German Service Sector Activity Rises

German services activity dipped slightly in November, according to results of a survey by Markit Economics released today.

The headline business activity index for the service sector rose to 49.7 in November from 48.4 in October.

The final composite output index climbed to 49.2 in November from 47.7 in October.

French Service Sector Climbs

French service providers reported another decrease in business activity during November, data from a survey by Markit Economics and CDAF showed today.

The seasonally adjusted final Markit France Services Business Activity Index increased to 45.8 in November from 44.6 in October.

Italian Service Sector Activity Declines

Output across Italy’s service sector decreased at a marked and accelerated rate in November, a survey by Markit Economics showed.

The seasonally adjusted Markit/ADACI Business Activity Index declined to 44.6 in November from 46 in October.

Spanish Production Slumps

Spain''s industrial production declined by calendar adjusted 3.3% annually in October, following a 7.5% drop in September, the statistics office INE said.

Spanish Bond Auction

The Spanish Treasury raised €4.25 billion from a bond auction of three-, seven- and 10-year debt today but fell short of the €4.5 billion maximum target,

The average yield on 10-year bonds maturing in January 31, 2022 fell to 5.290% from 5.458% at the last auction.

The average yield on the three-year bonds maturing in October 31, 2015 declined compared to the prior auction and for seven-year bonds maturing in July 30, 2019 the average yield was higher than at a last auction of similar paper.