The picture is improving in Euro markets, with indices moving into bullish territory after House Speaker Nancy Pelosi’s visit to Taiwan ended without any surprises, with investor attention turning again to quarterly results announcements and the latest macroeconomic data.
The new crisis in US-China relations on the occasion of Pelosi’s visit to Taiwan caused jitters in global markets which see the already tense relations between the two countries further deteriorating.
China, which considers Taiwan part of its territory, has announced military exercises in the region as well as restrictions on imports from the island, while warning the US of severe retaliation.
On the board, the pan-European Stoxx 600 index is up 0.1% to 436.43 points.
Germany’s DAX gains 0.1% to 13,462.08 points, France’s CAC 40 also gains 0.1% to 6,418.58 points, while Britain’s FTSE 100 moves with marginal losses of 0.03% to 7,406.82 points.
In the region, Italy’s FTSE MIB lost 0.04%, while Spain’s IBEX 35 gained 0.4%.
Later in the day, data released today showed that business activity in the Eurozone contracted slightly in July for the first time since the first months of 2021.
In particular, S&P Global’s composite PMI, which combines manufacturing and services, fell to a 17-month low of 49.9 in July from 52.0 in June, beating the initial estimate of 49.4. Readings below the 50 level indicate a contraction in activity.
“The economic outlook for the Eurozone has worsened since the start of the third quarter, with the latest data showing a contraction in GDP in July,” commented Chris Williamson, chief economist at S&P Global.
“Spiking inflation, continued interest rate hikes and supply concerns – particularly in energy – led to the biggest declines in production and demand in nearly 10 years, excluding the months of pandemic lockdowns,” he added.
However, the data announced today by Eurostat showed strong upward pressure at the factory gates, which is expected to continue fueling inflation.
In particular, producer prices increased by 1.1% in June compared to May, while on an annual basis producer prices jumped 35.8%, as announced by the European Statistical Service.
At the same time, retail sales fell as consumers continued to cut back on purchases amid a rally in inflation.
In particular, the volume of retail trade fell 1.2% in June in the Eurozone compared to May, according to the initial estimate announced today by Eurostat.
Meanwhile, the barrage of quarterly results continues today with Commerzbank, SocGen, BMW, Banco BPM and Siemens Healthineers among the European giants that released their quarterly statements before the start of trading.
Source: Capital
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