On a light day for economic data in Europe, the fact that German consumers are feeling more confident may give the markets some sense of direction.
A closely-watched consumer confidence barometer has rebounded to a new 6 year high heading into October, hitting 7.1 from an upward revised 7.0 in September.
GfK’s forward-looking sentiment survey, based on a survey of 2,000 people, signals further momentum for the German economy, as the country’s traditionally cautious consumers become more willing to spend amid broader signs of recovery.
Spain is heading for a big debt resaca, or hangover, as its national debt climbed to 92.2 per cent of gross domestic product in the second quarter, data from the country’s central bank show. To put that in context, that is more than double the 40 per cent reading at the end of 2008.
It is also up sharply from a reading of 77.5 per cent a year ago as Madrid still shoulders the burden of sorting out its former regional savings banks, paying for a misguided mid-crisis stimulus programme instigated by the previous government, and sharply reduced tax receipts as a result of its recession.
It might be the height of the summer in southern Europe, but a long winter for Greece’s jobs market drags on, with unemployment in May reaching record levels.
The jobless rate among the crisis-stricken country’s workforce shows no signs of bottoming out, as the austerity measures in place under the terms of its financial bailout continue to bite.
The Hellenic Statistical Authority ( El Stat) said the unemployment rate reached 27.6 per cent in May, the worst figure since the data series began in 2006. April’s data were revised higher to 27 per cent.
The chart below, taken from the El Stat website, shows the trend for the number of people in work now heading down towards 3.5m. Greece’s total population is just over 11m.
Underscoring the need for the three-pronged “Abenomics” growth programme to revive the economy, Japan produced a trade deficit for the 12th consecutive month in June.
The weaker yen has produced a boost for exports — they rose for a fourth straight month — but that’s still being outweighed by rising import costs.
Highlights from the report:
The trade deficit in June was Y180.8bn, a larger gap than forecasts of Y155.7bn (Prior was Y996.4bn).
June exports rose 7.4 per cent from the prior year, a weaker reading than forecasts for a 10 per cent gain (Prior figure was 10.1 per cent).
June imports rose 11.8 per cent, a slower pace than forecasts at 13.8 per cent (prior gain was 10.1 per cent).
The adjusted merchandise trade balance–a measure of “visible” trade including goods such as cars and electronics–showed a deficit of Y598.7bn, near forecasts of Y594.7bn. (The prior figure was revised to a smaller gap of Y777.9bn).
So, a good start to the week as far as stock markets are concerned. Investors were buoyed by a rethink about the US jobs figures from Friday, fairly upbeat comments on the economy from ECB boss Mario Draghi, and signs of progress in Greece and Portugal. Here are the closing scores:
• The FTSE 100 finished 74.55 points or 1.17% higher at 6450.07