German’s Good Retail Sales Maintains High European Shares
European shares increased to about seven-years up on Tuesday as German retail sales performed beyond expectation to really impress investors just before the European Central Bank launches the quantitative easing program.
The Euro group government bond gains increased a bit, but lingered around record lows as investors watch out for the European Central Bank trades. The ECB will collate the values of its scheme, publishing data after the meeting on Thursday and purchasing might start instantly.
Retail sales of Germany increased at 2.9 percent monthly, and 5.3 percent yearly in the month of January, exceeding the expectations of economic analysts.
The pan-European FTSEurofirst 300 index .FTEU3 increased to 0.1 percent at 1,562.36 points. The euro EUR= remained strong at $1.1190.
Bayerische Landesbank’s senior analyst, Norbert Wuthe, stated that “German retail sales got off to a very strong start in the new year on the back of (lower) energy prices and no doubt due to the (hike in) minimum wage”.
Merger reflections in the Portuguese banking sector backed up the European market. Shares in Banco BPI BBPI.LS and Banco Comercial Portugues BCP.LS all increased to 8 percent individually.
United States dollar reduced from a former 11-year top position against other main currencies, skinning against the Japanese yen following the speech Etsuro Honda, Japanese Prime Minister’s economic adviser made to Wall Street Journal stating that the US dollar against the Yen might be at the “upper limit of comfort zone”.
A Nomura currency strategist, Yujiro Goto, said that “Honda’s comments reflect the latest view of the government and come out of a proposed visit by Abe to the United States in April. They might not want the yen to weaken too much ahead of the visit. So in the short term the yen’s weakness could slow, but over the medium term it will still weaken” .
The US dollar index dropped to 95.363 at 0.1 percent after increasing to 95.516 in Asian trading.
A few nations, particularly the ones in the G7, commented against the sudden laxity of the Japanese Yen at the beginning of 2013, immediately after Prime Minister Abe stepped into power. Bank of Japan at that time tried to start a great quantitative easing program to restore the rate of inflation to 2 percent.