This morning’s first estimate of Q2 Eurozone GDP is expected to illustrate that the Eurozone economy did emerge from recession in QII after 6 consecutive quarters of contraction. French and German GDP both soared in QII by 0.5% and 0.7% QoQ respectively. Consensus estimates are for a +0.2% QoQ Eurozone expansion, a number which will probably now be bettered.
Meanwhile, US economic momentum also continues to improve. Advance retail sales grew by 0.2% MoM in July, with June gains revised up to 0.6% MoM. However, the underlying gain in the ex autos and gas measure was stronger at 0.4% MoM. Ex autos only it was even a little firmer at +0.5% MoM. Spending is coming through on Main Street, the second half of the year will be stronger in the US as well. Bond markets in both Europe and the US sold off in the wake of the economic data, other markets were more subdued.
In the UK CPI inflation remained comfortably above target but edged down a tenth to 2.8% YoY in July, the core CPI measure dipped to 2.0% YoY. Summer clothes discounting and a fall in airfares were largely responsible for the dip. However, headline inflation is still expected to edge up over the 3% mark in coming months before topping out.
This morning’s UK unemployment data typically do not garner much interest, although the new prominent role afforded to the ILO unemployment rate suggests that UK labour market numbers could also become top-tier in due course.
Read the full report: Market Research
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