-
Mixed start in Europe amid Spanish and German inflation reports.
-
Eurozone continues to grow, while German GDP falls to -0.1%.
-
Microsoft earnings key as markets prepare for major volatility ahead.
A somewhat mixed start for European markets has seen the FTSE 100 lag behind its mainland counterparts, with traders weighing up a whole host of eurozone data points released over the course of the morning. This morning saw the Spanish kick off an inflation-heavy period that culminates in tomorrow’s eurozone CPI release. With Spanish inflation falling by -0.5% in July, we saw the country move one step closer to a return to target (annual CPI fell to 2.8%). However, the early signs from the German regional inflation data provided less grounds for optimism, with North Rhine, Westphalia, Saxony, Baden Wuerttemberg, Brandenburg, and Hesse all seeing inflation rise or remain flat.
The trajectory of the German economy remains a concern for Europe, with the manufacturing powerhouse seeing second quarter growth fall back into negative territory (-0.1%). Fortunately, things are more stable for the eurozone as a whole, with the latest GDP figure beating expectations to post a second consecutive 0.3% reading in Q2. Crucially, we also saw a sharp decline in eurozone consumer inflation expectations, with the fall into a seven-month low helping to build a narrative that should embolden the ECB to cut rates in September.
Today marks the beginning of a highly volatile and unpredictable period that could make or break market sentiment for the coming months. In a week that sees roughly a third of the S&P 500 report, markets will be crossing their fingers as we await earnings from four of the Mag7. Today will have a particular focus on Microsoft, with the world’s second-largest listed company reporting before the open. The story appears to be similar for many of these big tech names, with traders on the lookout for signs that the vast sums of money being invested in AI has started to pay dividends. However, once again it may be the now hum drum cloud services segment which comes to the rescue to drive earnings higher once more.
This material is a marketing communication and shall not in any case be construed as an investment advice, investment recommendation or presentation of an investment strategy. The marketing communication is prepared without taking into consideration the individual investors personal circumstances, investment experience or current financial situation. Any information contained therein in regards to past performance or future forecasts does not constitute a reliable indicator of future performance, as circumstances may change over time. Scope Markets shall not accept any responsibility for any losses of investors due to the use and the content of the abovementioned information. Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
AUD/USD clings to recovery gains below 0.6600 ahead of Chinese trade data
AUD/USD is looking to build on the previous rebound in the Asian session on Thursday. The RBA's hawkish stance and China's stimulus optimism outweigh sustained US Dollar strength and weak Australian trade data, keeping the pair afloat ahead of Chinese trade figures.
USD/JPY turns defensive near 154.50 after Japanese verbal warnings
USD/JPY is holding its retreat near 154.50 early Thursday, following a massive surge on Wednesday, on speculations that Japanese authorities might intervene to prop up the domestic currency. However, the BoJ rate-hike uncertainty, along with the recent surge in the US bond yields, should cap the upside for the lower-yielding JPY.
Gold price hangs near three-week low; seems vulnerable to slide further
Gold price ticks higher during the Asian session, albeit it lacks bullish conviction and remains close to a three-week low touched on Wednesday. The optimism about future economic growth under the new Trump presidency remains supportive of the upbeat market mood.
What's next for Bitcoin and Crypto industry following Trump's victory in US Presidential election
The 2024 US presidential election ended with pro-crypto advocates leading the House of Representatives, the Senate, and Donald Trump as the president-elect. The results stirred massive celebration across the crypto industry, with Bitcoin and the crypto market rallying following Trump's win.
Trump wins: Tax cuts come with a cost
Donald Trump’s victory will ensure a lower tax environment that should boost sentiment and spending in the near term. However, promised tariffs, immigration controls and higher borrowing costs will increasingly become headwinds through his presidential term.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.