The confidence in European market is shaky
Weak Japanese economic data on Monday tempered European investors’ optimism about ECB plans to tackle the crisis, with stocks down slightly and the euro flat. Japan’s economic growth slowed in the second quarter as the eurozone crisis hurt exports and domestic consumption remained subdued.
A fragile economic recovery in the US and the ongoing debt crisis in the eurozone, two of the biggest markets for Japanese goods, have hurt the country’s export sector. A strong Japanese currency has made things more difficult for the country’s exporters by making their goods more expensive and denting their profits.
More evidence that the eurozone crisis is impacting on the larger economies came as France reported its industrial production stagnated in June. Industrial output was unchanged, following a 2.1% fall in May while manufacturing activity edged up a modest 0.1%. The pace of decline in production is increasing and the uncertainty regarding a solution to the eurozone debt crisis will continue to weigh on business sentiment.
There are some key release for Sterling this week with CPI inflation tomorrow. Unemployment and the BoE minutes on Wednesday and retail Sales on Thursday.
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