- German Retail Sales Slump to Lowest Levels on Record.
- Eurozone Manufacturing PMI[1] Reveal Sharp Decline in New Orders.
Trading Earnings Season: 3 Steps for Using Earnings Reports[2]
DAX 40: Rallies Higher as Poor German Data Fails to Dampen the Mood
The DAX[3]traded higher in European trade helped by strong corporate earnings and constructive sentiment. The early gains do seem tenuous at best ,however, as weak German retail sales data raised fresh doubts about the region’s economic recovery.
European markets started the new month with a degree of optimism as HSBC (LON:HSBA), the region’s biggest bank, raised its near-term return on tangible equity goal to at least 12% from 2023 onwards, expressing confidence in the future, and vowed to restore paying quarterly dividends next year. Its stock rose over 6%. Still, gains are limited in Europe as investors are worried about the likelihood of a recession in the region on the back of disappointing economic data.
How Central Banks Impact the Forex Market[4]
German retail sales plummeted in June as consumers cut spending on non-essential goods to cope with record inflation.Sales were down 8.8% from the previous year, the most in three decades. Non-food items such as furniture and household appliances or clothing and shoes registered even steeper declines.The data add to an already strained outlook. Europe’s largest economy is suffering like few othersas more and more economists argue that a recession later this year is inevitable.
Meanwhile, factory activity in the Eurozone[5] contracted in July, with the region’s manufacturing PMI[6] index falling to 49.8, compared with a reading of 52.1 the previous month, as inflationary pressures and macroeconomic uncertainty weighed on demand. This follows a worrying growing global trend as South Korea's factory activity fell for the
