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Eurozone

Eurozone March retail sales -0.4% vs. -0.1% m/m expected, Eurostat’s most recent data – 4 May 2022

Prior +0.3%; revised to +0.4%, Retail sales +0.8% vs +1.4% y/y expected

Previously +5.0 percent; now +5.2 percent

Retail deals in the Eurozone fell more than anticipated in March, as cost pressures burdened the locale’s utilization action.

Looking at the specifics, retail trade volume decreased by 2.9 percent for automotive fuels, 1.2 percent for non-food products, and increased by 0.8 percent for food, drinks, and tobacco.

 Oil

Oil is up more than 3% on the day as the EU proposes a phased embargo on Russian supply.  

WTI crude trades back above the $106 level. Oil has shown significant resilience in recent weeks, as dip buyers have kept prices elevated for the most part.

Sure, we aren’t exactly chasing new highs since the early March spike, but there is a sense of stubbornness in staying above $100 for the time being.

The latest sanctions proposed by the EU here state that they intend to phase out Russian oil within the next six months, though the details are vague.

In any case, this just adds to supply constraints, as it is unclear how the EU will look for alternatives (which will almost certainly be more expensive), particularly for countries that are more heavily reliant on Russian energy.

Returning to the oil chart above, there is a resistance region on the daily chart near $108 that may help to limit any further upside leg for the time being. The Fed will also be a focus because it has an impact on the dollar and risk sentiment, so be wary of that.

UK

UK March mortgage approvals 70.69k vs 70.78k expected

Latest BOE data – 4 May 2022

Prior 70.99k, Net consumer credit £1.3 billion & Prior billion £1.9 billion

Mortgage approvals were little changed in March, remaining well above the 12-month pre-pandemic average of 66.7k (up to February 2020).

In terms of credit conditions, the annual growth rate for all consumer credit rose to 5.2 percent in March, up from 4.5 percent in February.

That is the highest reading since February 2020, indicating that economic conditions are starting to heat up a bit more; however, base effects are also a factor in this case.