Bonds

LONDON (ShareCast) - Eurozone retail sales dropped a worse than expected 0.4% month-on-month in May, official figures showed Friday.

Analysts had been expecting a 0.1% decline. Year-on-year sales in the 16-country currency area fell 3.3%, according to European Union statistics office Eurostat, also worse than predictions of a 2.7% decrease.

In May, compared with April, food, drinks and tobacco rose by 0.2%, while the non food sector decreased by 0.6%.

Among the Member States, total retail trade rose in four and fell in twelve. The only increases were observed in Latvia (+0.9%), Belgium (+0.6%), Germany and Romania (both +0.4%), and the largest decreases in Lithuania and Austria (both -1.8%), Slovakia (-1.7%), Bulgaria, Denmark and Sweden (all -1.1%).

"On the positive side for consumer spending, eurozone consumer confidence rose significantly in June to be at an eight-month high, while purchasing power is being boosted by modest deflation across the eurozone," said Howard Archer, chief UK economist at IHS Global Insight.

"Nevertheless, sharply higher and rising unemployment across the region means that serious concerns remain about the future strength of consumer spending," he added.