European stock markets have gained at the opening bell.
The FTSE 100 in London is up by less than 0.05% – perhaps not surprising for a scorching day at the end of July – at about 5,986 points.
However, France’s Cac 40 has gained 0.5%, and Spain’s Ibex is up by 0.6%. That helped the Euro Stoxx index of blue-chip countries across Europe gain 0.5%.
Introduction: Economists predict fall of more than 8% in eurozone output
Good morning, and welcome to our live coverage of business, economics, the eurozone and financial markets on a fine summer’s day across much of the UK.
Economists are not the only ones who could tell you that economic activity has stalled in most major economies because of the coronavirus pandemic, but today they will give a first view of exactly how bad the picture is for the eurozone economy, with the first estimate of GDP growth for the second quarter.
Estimates collected by Refinitiv range from -8% quarter-on-quarter to -18.5%, so barring a real surprise it will almost certainly be the deepest recession since the bloc was established (and likely since the second world war).
US tech companies on Thursday evening revealed phenomenal financial results (a day after receiving blows from members of US Congress over antitrust concerns). Futures for Wall Street’s main stock market indices point to a positive open after Apple, Amazon, Facebook and Google-owner Alphabet all benefited from the work-from-home orders to beat earnings estimates.
Yet it was clear from data published on Thursday that they were the exception, not the rule, after US GDP fell by 32.9% at an annualised rate in the second quarter, a record decline.
Concerns over economic momentum held back Asian stock markets on Friday. Japan’s Topix index closed at a two-month low after posting its biggest daily loss in four months. Shares in Shanghai and Hong Kong gained 0.5% and less than 0.1% respectively.
Depending on movements over the course of today the US dollar could also record its worst month in a decade. Investors bought the greenback in droves early in the crisis, but they have since sold it off as the realisation has seeped through that the Federal Reserve will not be in a mood to tighten monetary policy (boosting the relative value fo the dollar) any time soon.
- 8am BST: Spain GDP growth rate (Q2 quarter-on-quarter – previous -5.2%; consensus -16.6%)
- 9am BST: Italy GDP growth rate (Q2 qoq – prev. -5.3%; cons. -15%)
- 10am BST: Eurozone GDP growth rate (Q2 qoq – prev. -3.6%; cons. -12%)
- 10am BST: Eurozone annual inflation rate (July annualised – prev. 0.3%; cons. 0.2%)
- 1:30pm BST: US personal income (June month-on-month – prev. -4.2%; cons. -0.5%)
- 1:30pm BST: US personal spending (June mom – prev. 8.2%; cons. 5.5%)