Retail sales for June developed slightly below market expectations and considerably below our estimates. Revenues declined for the second month in a row. Compared to the previous month, revenues in June declined by 0.5%. A significant negative contribution came from car sales. All other product categories together posted a decline of 0.1%. Among these categories, the development differed. Electronics, health care products and clothing showed higher revenues than in May. Meanwhile furniture, building materials and gasoline - just to name the most important items - posted declines.

Today's data is yet another set of bad news from the US economy. The backbone of the US economy - private consumption - does not show any clearly improving trend, even as this component will show growth over the second quarter in the GDP data released at the end of this month. The recovery of the US economy is not stable and headwinds will increase with the end (or decline) of the contribution from government stimulus. Lower growth rates for the economy in the second half of the year are becoming increasingly probable. Markets reacted with lower yields, while the EURUSD hardly moved, possibly as the dollar had already weakened considerably before the release.