German data paints gloomy picture

The morning session was dominated by European economic data, much of which has disappointed.

While the broader European ZEW sentiment figures were encouraging, Germany’s ZEW data highlighted the more pessimistic view being taken in the economic heartland of the eurozone. Nowhere is this more clearly demonstrated than from Europe’s car sales figures. June’s sales were the lowest since 1996, while the first-half figure was the weakest since 1993. A background of rising inflation, lowering earning power and increasing unemployment have all contributed most to the industry’s demise.

There was also confirmation this morning that UK inflation is continuing to rise, although not at the speed feared. However, it’s still rising fast enough that next time around Mark Carney will have to write an open letter to the chancellor explaining why the targeted 2% rate has been missed. Mr Carney said from the outset that the inflation rate is not his primary concern, as he aims to create a more efficient working environment with the odd bid of stimulus throw in.

The pace of the US reporting season has picked up, with Goldman Sachs and Johnson & Johnson announcing better-than-expected numbers. The list of firms surpassing estimates is getting longer and so far of the major firms, only Coca-Cola has failed to join in.

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