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Hello and welcome to our slippery coverage of the global economy, financial markets, the eurozone and businesses.
The last decade has not really been a time of prosperity, but we may miss it once it's over. Central bankers are trying to cushion shocks in the event of a slowdown in the global economy, with a new consensus around a new round of stimulus measures from the world's two largest central banks.
Yet, everything will not be easy. Asian stock markets down This morning, after the European Central Bank yesterday managed to sow doubts about how quickly it will support the economy of the euro area. In Japan, the Nikkei 225 index lost 0.45%, the broad Topix lost 0.4%, while the shares of the Australian ASX 200 lost 0.36% and the Hang Seng index of Hong Kong lost 0.4%. Only Chinese stock exchanges withstood the trend.
President of the ECB Mario Draghi We also understood the message that the rate cuts would come with the badertion that the board of governors had not even discussed rate cuts at this week's meeting. This contradicts the market bets that a July cut was a 50/50 bid.
However, the message was rather clear: a rate cut at the September ECB meeting would be a shock. Economists will now spend the rest of the summer trying to understand the scale of the reduction and accompanying measures, such as quantitative easing (the program stimulates purchases of # 39; bonds).
Ian Williams, economist at stockbroker Peel Hunt, I said:
Draghi described the Eurozone's economic outlook as "worse and worse," although he also suggested that the risk of recession is "quite low." He explained that, despite the growth in employment and wages, external factors are weighing on growth in the second and third quarters; especially commercial uncertainties, a particular challenge for the manufacturing sector. The risks therefore remain downward.
After Draghi's rigorous badessment of European prospects, the main economic event of the day will be the US GDP Released at 1:30 pm TSB today.
Economists expect on average an annualized growth rate of 1.9% for the second quarter, a significant slowdown from the previous quarter by 3.1%.
If that happens, all eyes will be on Donald Trump's Twitter account to see if the US President renews his attacks on Federal Reserve Chairman Jerome Powell. Trump wants a more flexible policy to support the economy and its prospects for reelection.
Powell's Fed will meet next week to discuss its latest monetary policy. Investors are banking on interest rates, which suggests that the central bank will relax its chances at 100%. This chart of a few days ago shows why: the leading indicators seem to show that the world's largest economy is weakening.
On the front of the company news, a tetchy Sports Direct publish its annual results sometime today – a week later than originally planned.
The delay was caused by the complex integration of House of Fraser as well as "the current uncertainty about the future performance of this company's business activities," but this week the company said its numbers would meet expectations earlier. Life is certainly never boring after the founder's court, Mike Ashley.
L & # 39; s calendar
- 11.30 BST: decision of the interest rate of Russia
- 13:30 BST: US GDP growth rate (second quarter)
- 1:30 pm TSB: US consumer spending prices (second quarter)
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