FOREX: USD Weaker into NFP, At Risk of Correction on Stronger Print

• MNI: EUROZONE JUN RETAIL SALES +0.3% M/M, +3.1% Y/Y

Eurozone (real) retail sales were inline with expectations in June on a sequential comparison, at 0.3% M/M, but the print was stronger on a level basis considering a positive revision to May (now -0.3%, revised from -0.7%). The uptrend in place since late-2023 continues even the level is still a little below 2021 highs.

• Across sectors, all main categories rose after across the board declines in May: Food, drinks, tobacco 0.2% M/M, non-food products ex automotive fuel 0.6%, automotive fuel 0.4%. None of the categories stand out in in YTD directional trends.
• Across countries, the June print was a bit mixed, with three out of the "big 4" printing positive but France weak at -0.9% M/M.
• The overall Y/Y print was 3.1% in June, firmer than consensus of 2.6% (1.9% May, revised from 1.8%). Across categories, non-food products and auto fuel continue to fare better Y/Y than the food, drinks, tobacco category.
• Eurozone consumer confidence ticked up a little most recently but remains subdued: "Consumers’ perception of their households’ financial situation, both backward- and forward-looking, and their intentions to make major purchases improved, while their expectations about the general economic situation in their country worsened", the European Commission commented on the latest respective release.
• A June McKinsey study found that inflation remains consumers' main concern in the EU, although this has decreased compared with last year.

"German SMEs are increasingly optimistic about the coming months. As a result, the business climate in the sector rose for the fifth time in a row in July – this time by 1.6 points to minus 12.4 points. Although this is still below the long-term average, which is marked by the zero line, the economic upturn seems within reach." - via KfW

• "Although small and medium-sized enterprises rated their current situation only marginally better than in the previous month, their business expectations for the next six months rose significantly, pushing the index further out of its slump."
• The KfW SME Barometer is produced by IFO and is based on the "institute's economic surveys" - so some correlation with the broader IFO business climate (which has been trending upwards this year) does not come unexpected.
• Business sentiment in Germany is, on balance, trending upwards more broadly, with also the Manufacturing PMI standing at cycle highs. The services PMI meanwhile has seen some volatility but little overarching directional trend this year.