Euro markets closed with mild gains against the background of Asia

Euro markets closed with modest gains on Monday, with investors assessing new macroeconomic data from China and Japan today.

In particular, the pan-European Stoxx 600 the other pan-European also rose 0.34% to 442.35 points Stoxx 500 strengthened by 0.34% to 3,789.62 units.

In the rest of the board, the German DAX gained 0.15% to 13,816.61 points, the British FTSE 100 and the French added 0.11% to 7,509.15 points CAC-40 closed up 0.25% at 6,569.95 points.

In the periphery, the Spanish IBEX-35 the Italian closed at 8,427 units with a rise of 0.32% FTSE MIB gained 0.49% to 22,970.73 points.

After a flurry of macro data last week, including US inflation and British economic activity, investors’ eyes turned today to Asia whose two biggest economies gave mixed messages.

In China, the economy showed unexpected slowing trends in July, with industrial activity and retail trade under pressure from the zero-Covid policy.

In this climate after all, the People’s Bank of China (PBOC) unexpectedly proceeded to cut the one-year medium-term lending facility (MLF) rate to some financial institutions by 10 basis points (bps) to 2.75% from 2.85%.

It is noted that in a Reuters survey of 32 analysts last week, all respondents expected the interest rate to remain unchanged.

In Japan, by contrast, the economy grew for the third consecutive quarter, thanks mainly to household consumption.

Specifically, GDP in the world’s third-largest economy expanded significantly by 2.2% year-on-year in the second quarter, up from 0.1% in the January-March period, although slower than markets had expected in 2.5%.

Back in Europe, estimates of an impending recession are rising, now at their highest level since the pandemic hit in November 2020, as the energy crisis threatens to further push up record inflation.

In particular, the probability of GDP contraction for two consecutive quarters – the technical definition of a recession – has now risen to 60% in a Bloomberg survey, up from 45% previously and just 20% before Russia’s invasion of Ukraine .

Meanwhile, data released by the United Kingdom showed that the economy shrank in the second quarter of 2022 as the country’s cost of living crisis hit home. Official data showed GDP shrank 0.1% on a quarterly basis, less than the 0.3% contraction expected by analysts.

In individual stock moves, Telecom Italia rose 6 percent on news that Italy’s far-right Brotherhood of Italy party, which leads the polls, may take the company private.

Meanwhile, Sweden’s Storskogen Group closed down nearly 10% ahead of its second-quarter results on Tuesday.