German Retail Sales Rise, UK GDP Better Than Expected

Ibeth Rivero

The German Chancellor, Angela Merkel recently said during a news conference that the economic impact of the sanitary crisis cannot be offset with state intervention while praising the German health system.

GermanyThe Federal Statistical Office of Germany reported that retail sales gained 3.7 percent (year-to-year) in August, below July's figure which stood at 5 percent and lower than what the analysts expected, who foresaw it to increase by 4.2 percent. In monthly terms, retail sales climbed by 3.1 percent, improving from July's -0.2 percent and considerably over the surveyed analysts' expectations, who foresaw it to be at 0.5 percent.

Just like other countries in Europe, Germany is currently facing a surge in the number of coronavirus infections. So far, 290,466 cases have been reported in Germany, as well as 9,556 deaths.

The German Chancellor, Angela Merkel recently said during a news conference that the economic impact of the sanitary crisis cannot be offset with state intervention while praising the German health system. She highlighted the need for a Covid-19 vaccine that would be available globally, warning against a possible upcoming tough phase.

The United Kingdom's Office for National Statistics reported that the second quarter's Gross Domestic Product contracted by 21.5 percent (year-to-year), after contracting by 21.7 percent in the previous quarter, and better than the analysts' expectations, who foresaw it to contract by  21.7 percent. In quarterly terms the GDP fell by 19.8 percent in the second quarter, improving from the previous quarter's -20.4 percent and better than what the surveyed analysts expected, as they foresaw it to contract by 20.4 percent.

Despite the fact that the GDP's performance was better than expected, this is still the second biggest fall in the Gross Domestic Product that has been ever recorded.

More complete data has not substantially changed the economic picture, with the UK economy still shrinking by around a fifth in the first half of the year, far bigger than any previous contraction on record,” commented the Office for National Statistics' Deputy National Statistician.

In the UK, the number of COVID-19 cases is also on the rise. So far, 446,156 cases have been reported, as well as a death toll of 42,072.

The European Central Bank President, Christine Lagarde commented that low inflation is a significant challenge for the bank.

A persistent failure to meet the inflation aim can feed into inflation expectations and would call for a shorter policy horizon,” said Lagarde during a conference hosted by the Institute for Monetary and Financial Stability.

Lagarde also highlighted the need for a consensus regarding what tools are available for policymakers when the inflation levels are too low.

Yesterday the main European stock indices closed in the negative territory. The Dax dropped by 0.35 percent, closing the session at the 12,825.82 level, while the CAC 40 went down by 0.23 percent during the session, closing at the 4,832.07 level. In the same way, the Euro Stoxx 50 dropped by 0.28 percent, closing the session at the 3,214.30 level, while the United Kingdom 100 went down by 0.52 percent during the session, closing at the 950.5 level.

By 7:30 GMT the Euro dropped by 0.16 percent against the US dollar, falling to the 1.1724 level. The Pound Sterling went down by 0.36 percent against the greenback, falling to the 1.2815 level.

Ibeth Rivero

Ibeth contributes daily market commentary in both English and Spanish (both of which she speaks fluently) and she also manages the DailyForex mobile app to ensure that traders around the world are getting important market updates in real time.

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