The European session will see minimal data releases, consisting mainly of low-tier indicators. In contrast, the American session will feature the US Retail Sales report and the US NAHB Housing Market Index.
At 12:30 GMT/08:30 ET, the US Retail Sales for February is projected to show a month-on-month increase of 0.6%, following a decline of 0.9% previously. The ex-Autos figure is expected to rise by 0.4%, compared to a decrease of 0.4% earlier, with the Control Group anticipated to growth by 0.2%, versus a previous decline of 0.8%.
Consumer Spending Trends
Consumer spending has remained stable recently, supported by positive real wage growth and a resilient labour market. However, consumer sentiment has been weakening due to ongoing trade wars and uncertainty around tariffs, which may impact spending.
We expect trading volumes to remain subdued in the first half of the day, given the lack of high-impact releases in Europe. Those focused on macroeconomic data may look ahead to the American session, where retail sales figures will provide fresh insights into consumption trends in the world’s largest economy. With spending habits being a core driver of growth, deviations from expectations will likely influence short-term sentiment.
February’s retail sales data will reveal whether consumer spending has regained momentum after a weaker-than-expected start to the year. Forecasts suggest a return to growth, but the prior decline introduces an element of uncertainty. The core measure, which excludes volatile components such as automobiles, is also set to rebound. Yet, if the trend in discretionary spending remains weak despite an improving labour market, confidence in future demand may waver.
A key factor underpinning household expenditure has been the combination of rising real wages and stable employment conditions. However, softer confidence levels suggest a degree of caution. Unresolved trade tensions and the resulting unpredictability surrounding tariffs could weigh on purchasing decisions. Should this trend persist, we may see spending patterns shift away from non-essential goods toward necessities.
Housing Market Sentiment
The NAHB Housing Market Index, scheduled later in the session, will offer an update on homebuilder sentiment. While not traditionally a major market mover, it serves as an indicator of housing sector confidence. A stronger reading could reinforce the outlook for residential investment, whereas a weaker figure might suggest that affordability concerns or lending conditions are dampening activity.
Market participants will likely pay close attention to any divergence between expectations and actual outcomes. A weaker-than-anticipated retail sales report might fuel speculation that economic resilience is beginning to soften. Conversely, stronger numbers could reinforce expectations that consumer demand remains intact, potentially influencing upcoming central bank discussions.
With uncertainty persisting around external risks, any change in domestic spending habits could shift expectations for growth moving forward. Adjustments based on incoming data should reflect the broader theme of balancing short-term reactions with longer-term positioning.
