German retail sales down 1.9% on year in March

By Todd Buell
German retail sales fell in March in line with expectations, data from the country's statistics office                                         
Adjusted sales fell by 0.7% on the month, retreating after two positive readings in the first two months of the year
This matched a forecast of economists polled by Dow Jones Newswires                                        
Adjusted annual sales fell by 1.9% in March                                        
Retail sales data are often volatile and subject to frequent revisions
Quarterly data showed sales grew by 1.3% versus the last three months of 2013
This supports expectations that the German economy experienced very strong growth in the first quarter                                        
"German households have recently shown increasing confidence" due to better income expectations, which is related to the improved labor market and lower inflation, wrote Annalisa Piazza of Newedge in a research note following the release                                        
Tension between Ukraine and Russia threatens to undermine consumer confidence, a key indicator  "The annexation of Crimea by Russia and the escalation of tensions in eastern Ukraine have caused some consumers to fear that the notable economic recovery could be weakened," said the GfK survey                                        
Moreover, this belief "could be strengthened if the situation continues to escalate and if the West responds with stronger economic sanctions against Russia," it said