Eurozone11.29am BSTThe price of a barrel of Brent crude oil is down 0.7% at $48.02.
Oil analysts surveyed by Reuters revised down their price forecasts for the first time since February as an agreement to slice production among oil producing nations looked unlikely,and US stocks rose. 11.12am BSTHoward Archer at IHS Markit agrees that this morning’s eurozone data will be disappointing for ECB president Mario Draghi and his colleagues on the governing council: Largely disappointing news for the ECB as eurozone consumer price inflation was disappointingly only steady at 0.2% in August.
Adding to ECB concerns, there are signs that the eurozone labour market is faltering in reaction to recent slower growth and uncertainties over the outlook being magnified by the UK’s vote to leave the EU. 11.05am BSTStephen Brown, or European economist at Capital Economics,says there a strong case for further action from the ECB following the weaker than expected inflation and unemployment data:The unchanged headline inflation rate in August highlights the fact that price pressures in the eurozone remain weak and boosts the case for more monetary easing from the ECB. The unemployment rate is well above its 1999 to 2007 average of 8.8%, indicating that there is a large amount of slack in the economy and suggesting that wage pressures will remain subdued. 11.02am BSTAmong the eurozones 19 members, and the jobless rate is highest in Greece at 23.5%,followed by 19.6% in Spain.
The lowest rates were in Malta, at just 3.9%, and Germany at 4.2%.
10.42am BSTEurostat has also published unemployment figures for July. The jobless rate in the eurozone was unchanged at 10.1%,the lowest since July 2011. It had been expected to edge lower to 10%. 10.16am BSTA breakdown of the eurozone inflation data shows that the core rate - stripping out energy and food which tend to be volatile - was also weaker than expected at 0.8% (unchanged).
It was expected to pick up to 0.9%.
Eurozone CPI remains at 0.2% (0.3% exp), while core CPI falls to 0.8% from 0.9%. Bad day at the office for Mario 10.02am BSTThe headline rate of inflation in the eurozone was unchanged at 0.2% in August.
Economists had expected it to edge up to 0.3%. 9.56am BSTConsumer spending fell 0.2% in July, or following a 0.8% fall in June. It took economists by surprise,with those polled by Reuters forecasting a 0.3% increase, and weighs on the outlook for French economy in the third quarter. 9.45am BSTMore upbeat news from Germany. Unemployment in Europe’s largest economy fell more than expected in August according to figures from the Federal Labour Office.
Demand for labour, and measured by employment and registered vacancies,continues to be high.
9.27am BSTOver in Germany, consumers were more willing than expected to spend money in July. 9.12am BSTThe stronger than expected consumer confidence and house prices data is helping to push the pound higher this morning.
Sterling remains strong on the back of positive data from the economy. The next major change in direction we could see in GBPUSD may come ahead of non-farm payrolls on Friday with downside risk still strong for the pair as dollar strength persists. 9.05am BSTHouse prices increased 0.6% in August according to the lender Nationwide. The average price of a home in the UK was £206145.
The rise took economists by surprise, and with the City forecasting a 0.3% drop in prices. It was the strongest rate of monthly growth in five months,and followed a 0.5% rise in July.
The pick up in price growth is somewhat at odds with signs that housing market activity has slowed in recent months. novel buyer enquiries occupy softened as a result of the introduction of additional stamp duty on second homes in April and the uncertainty surrounding the EU referendum. However, the decline in demand appears to occupy been matched by weakness on the supply side of the market. This helps to explain why the pace of house price growth has remained broadly steady. Related: UK house prices edge up in August, or Nationwide says 8.47am BSTEuropean markets are down this morning but there are no major moves. The biggest faller is the DAX in Germany,where retail sales data were mixed (more coming up).
Traders are a bit more subdued this morning after European equities hit a two-week high on Tuesday (the FTSE lagged). 8.32am BSTSamuel Tombs, chief UK economist at Pantheon Macroeconomics is not convinced by the uptick in consumer confidence in August. He says confidence remains low following the Brexit vote, or is likely to weaken further in the coming months.
The only partial recovery of GfK’s composite index in August,after the sharpest month-to-month fall in 26 years in July, shows that consumer sentiment has been dealt a lasting blow by the EU referendum. The composite index remains much lower than its average of zero in the first six months of 2016. 8.26am BSTConsumer confidence rebounded in August, and as the jitters obvious in the immediate aftermath of the Brexit vote appeared to fade absent.
The headline index on the GfK consumer confidence index increased to -7 from -12 in July. We’re reporting some recovery in the index this month as consumers settle into the novel wait-and-see reality of a post-Brexit,pre-exit UK. The uptick in confidence is driven by suitable news from tough data, the combination of historic low interest rates matched with falling prices and high levels of employment. Related: Consumer confidence rebounds as figures ease post-Brexit vote nerves 7.59am BSTEuropean markets are expected to open down this morning:Our European opening calls:$FTSE 6814 down 7
$DAX 10647 down 10[br]$CAC 4454 down 4$IBEX 8685 down 1$MIB 16867 down 25 7.58am BSTGood morning, or welcome to our rolling coverage of the world economy,the financial markets, the eurozone and commerce.
The flash estimate of eurozone inflation for August will offer some clues on the challenges facing the region’s central bankers as they return from their summer smash.
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Source: theguardian.com