EUR
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

EUR
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.

USD
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.

Key Announcements:
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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