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A look ahead at Alun John’s European and global markets
Europeans will be hoping that Wednesday’s economic data will provide some respite after a string of negative headlines, but past form suggests they would be foolish to bet too much on it.
It might even be better for them to make a point about depressing numbers, since at least their earnings can provide some cheer if the bad news hits.
British inflation data is due at 0600 GMT, with economists polled by Reuters expecting consumer prices to have risen 9.8% in the 12 months to July, a further acceleration since the increase of the 9.1% reported during the 12 months to June.
It’s not good news for British workers who saw second-quarter earnings adjusted for inflation fall 4.1%, the biggest drop since records began in 2001, according to data released on Tuesday. Read more
The final second-quarter GDP reading for the euro zone is also due on Wednesday, and while preliminary data showed faster-than-expected growth, even then economists said it could be the economy’s last hurray. Read more
If the data below is any clue, it’s not great.
Earlier on Wednesday, New Zealand’s Central Bank signaled a tougher tightening path in the coming months to curb stubbornly high inflation, even as it delivered its seventh consecutive interest rate hike and Australian wage growth it had forecasts and was way behind inflation. Read more
The Kiwi dollar initially rose on the news before giving up its gains, although the Aussie held on to its losses.
Asian shares made small gains in morning trading, following overnight gains on Wall Street, where economic data is less depressing.
Japan led the way with the Nikkei (.N225) up 1%, while MSCI’s broader index of shares outside Japan (.MIAPJ0000PUS) rose just 0.2%.
Key developments that could influence markets on Wednesday:
UK July CPI, July PPI Eurozone Q2 Flash Employment, Q2 GDP US July Retail Sales US 20 Year Treasury Auction Federal Reserve Releases Policy Meeting Minutes July 18.00 GMT New Zealand central bank meeting and press conference. European Earnings: Swiss Life, Carlsberg, Uniper US Earnings: Lowe’s, Target, Cisco
Reporting by Alun John Editing by Kim Coghill
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