Spain has progressed another step away from the eurozone crisis, by releasing its strongest growth since the crisis began. Spanish GDP increased by 0.6% in the second quarter of 2014 which is better than the 0.5% expected, and means growth increased from the 0.4% growth in January-March.
With this said, Spain is also being hit by the deflationary strains in the eurozone. New inflation figures, released yesterday show that the consumer prices index fell by 0.3% annually in July.
In Germany inflation hits a new four-year low. Inflation dropped this month to 0.8%, the lowest it has been since February 2010.
The drop is likely to create uncertainties of deflation in the 18-member eurozone, where inflation fell to 0.5% in June.
Eyes were on the US yesterday to see if the economy has bounced back from its winter contraction.The US economy grew by 4% on an annualised basis in the second three months of 2014. This was much better than expected, and means US GDP rose by 1.0% on a quarter-on-quarter basis.
Also, business investment has risen strongly during the quarter by 5.5%, along with government spending and investment in home building all rising as well.
Exports jumped by 9.5%, having fallen by 9.2% in the first quarter as ice and snow disadvantaged US companies.
Some economists are worried that the growth figures are too good to be true because companies expanded their inventories – stocking up on goods and materials for the future, so ultimately the figures may not be a true reflection of how well the US economy
The IMF says the growing tensions over Ukraine could undermine financial
markets in Europe and beyond with a lot of Europe’s largest companies having
strong ties to Russia.
10:00 BST - EUR- Eurozone inflation (July) YoY expected to be unchanged at 0.5%
10:00 BST - EUR- Eurozone unemployment rate (June) expected to be unchanged at 11.6%
13:30 BST- USD- Initial jobless claims expected to be higher at 301K
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