Important developments today:
1. Japanese retail sales tumble in May
Japanese retail sales tumble in May… Retail sales in Japan decreased by 2% (m/m) in May, following four months of gains averaging 1%, as consumers pulled back spending in response to fears that the global economic recovery may stall. The month-on-month drop was the sharpest recorded in 2 years, and was led by a 5.9% drop in sales of automobiles, and an 8% plunge in demand for household durables. The weak sales data reflects consumers renewed fears regarding unemployment, which rose in recent months from 4.9% in February to 5.1% in April, signaling that the export-led manufacturing sector recovery is not translating into steady job growth in the Japanese economy. Momentum in retail sales also appears to be fading rapidly, dropping from 12% in April to 7% in May (3 month average, saar), while growth in annual terms fell to 2.7%, the lowest since January.
Source: Ministry of Economy, Trade and Industry
Among emerging markets:
In Latin America and Caribbean, Fitch revised it’s outlook on the Brazilian economy from stable to positive, reflecting the economy’s resilience to the Euro Area debt crisis. Although Fitch left the sovereign debt rating at BBB-, the improvement in outlook reflects movement towards an eventual rating upgrade in the future.
In Central and Eastern Europe and the CIS, Lithuania’s retail sales were up 2.4% (m/m) in May, following gains of 0.7% in the previous month. In year-over-year terms, retail sales remain 5.5% below levels in May 2009.