020 7898 0500The euro stopped the rot against the dollar yesterday, by strengthening following the release of some positive economic data. It performed well against sterling too, as economic and industrial sentiment came in above expectations in June. However, it is worth pointing out that they hovered around the same mark as last month, it’s just that analysts had expected a dip.
Business confidence for the eurozone came in at 1.38 from an upwardly revised 1.44 the month before and against expectations of 1.4. Services sentiment hit 14.4 against an expectation of 14.2, and consumer confidence fell by 0.5 which was as expected. It is the lowest reading since October and is largely a result of negative assessments of the eurozone’s general economic situation in the future.
German inflation came in as expected at 2.1% in June from 2.2% the month before (which was a 15-month high), while Gfk consumer confidence was slightly better than expected at 10.7. The figure is unchanged from a six-month low, but was still above market expectations of 10.6.
The eurozone’s flash inflation rate for June will be released this morning and is expected to have crept up to 2% from 1.9% the month before. This would put it smack bang on the European Central Bank’s target rate. It will be interesting to see if the figure can come in any higher and, if it does, whether this will increase expectations of an interest rate rise before the middle of next year.
We will also see retail sales and the unemployment rate from Germany. The eurozone’s largest economy hasn’t been performing all that great recently, as fears of a global trade war weigh heavily on confidence.
