French August consumer spending dropped -0.3% MoM, after a 0.4% MoM rise in July. Spending was down 0.1% YoY, after rising 1.4% YoY in July, which highlights the extension of the accumulated spending weakness this year. Retail consumption was down 1.4% YoY in August and while car spending remains up on the year, it dropped 1.0% MoM in August and the annual rate is considerably weaker than at the beginning of the year, which reflects reduced demand as oil and petrol prices jumped higher. All in all data points to weak consumption in Q3, which squares with expectations for another modest GDP number that quarter.
French September manufacturing PMI dropped to 43.6 from 45.8 in August, much weaker than our median of 46.0. Meanwhile the services PMI rose to 50.4 from 48.0 in the previous months, much better than our median of 48.0 and pointing to an end to the contraction in the services sector. Mixed numbers then, which will give both doves and hawks something to back their arguments.
As a result, the euro-dollar (EURUSD) pulled back to 1.4730-1.4740 after reaching an intraday high of 1.4811.