Today at 09:00 (GMT+3) German GDP for Q2 was released, as well as consumer spending index for July. As expected, the index has increased by 0.4%. It seems that German economy, the leading economy of Eurozone is deteriorating.
European currency and European stocks hardly reacted to this data. At the beginning of European session European stock index EuroStoxx50 was at yesterday’s closing level of 3045.0, and the pair EUR/USD traded at the level of 1.1140.
According to yesterday’s information from the German Ministry of Economics, economic growth in Q2 slowed down because of lower growth in consumer demand and exports. In Q1 German economy has grown by 0.7% versus the last quarter of last year.
According to the data released yesterday, consumer price index (CPI) in France fell by 0.4% in July against the previous month and rose by 0.2% compared with July 2015. Prices of products of the manufacturing industry have dropped by 2.9% in July compared with the previous month; prices of clothing and footwear have decreased by 14%.
Consumer price index (CPI) in Italy fell by 1.9% in July against the previous month and by 0.2% compared with July 2015.
According to the data, released at the end last month, French GDP in Q2 showed zero growth compared with the previous quarter, while Spanish GDP has grown by 0.7% after the rise of 0.8% in Q1.
Despite the lowering in the interest rate in the Eurozone to the record lows and large volume of asset purchase, inflation in Eurozone is below the target level of 2%.
Situation in the sectors of external and internal trading has deteriorated and economic growth pace in Eurozone has slowed down after Brexit.
Today at 12:00 (GMT+3) preliminary European GDP for and industrial production data Q2 will be released. This data will influence on the future policy of the ECB. At 15:30 (GMT+3) U.S. data on retail sales and producer price index for July will be published, which are the most important inflation indicators. It is expected that during this period volatility in the Euro, USD, European and American indices will be high.
In case of the weak data, the ECB will apparently continue further monetary policy easing in the Eurozone, which will have a positive impact on the European stock market, but the Euro may significantly weaken.
ECB’s meeting of the will be held on 8 September.