UKs Inflation drops to a two year low
The Tuesday started with some good news for the debt loaded country Spain. After Spain has sold 3.56 billion euro of 12- month bills at an average yield of 3.9% (down from 5.07 % at the previous auction) and 18-month security yielded at 3.66% (down from 4.42% last time) the Ibex35 was 67.90 points up at 6600 (1.04%) in early trading.
Regarding the UK, the rate of inflation, measured by the CPI (Consumer Prices Index) was 2.4 % in the year to June, down from 2.8% in the year to May and lower than analysts expected (2.8%). The Retail Price index, including housing costs fell to 2.8% from the previous month’s 3.1%. Also the Consumer Price Index in the US was published today and remained steady (0%) after a fall of 0.3% in May which shows that “inflation is not a concern at this time”, according to Ryan Sweet, a senior economist at Moody’s Analytics.
Moody’s continues downgrades in the banking sector and cut its rating for 13 Italian banks overnight from A3 to Baa2. Moody’s has already cut the Italian government rating last Thursday and said that “banks are normally rated no higher than a government”.
Further bad news came from Germany. Investor’s confidence continues to decrease, according to the ZEW “Zentrum fur Europaische Wirtschaftsforschung” (eng: Centre of Economic Sentiment). The German ZEW index, based on responses from 273 analysts, fell from -16.9 to -19.6 in June, hitting its six-month low. Still in Germany, the German DAX closed up slightly (0.2%) at 5678 whereas the FTSE 100 finished marginally down (0.6%) at 5629. The UK’s equity index was dragged down by its significant exposure to mining companies, whose fall today reflected global economic concerns and specific Chinese slowdown worries.
This was posted in Bdaily's Members' News section by James .