The Ibex 35 is far from having its best week. Concerns about the Chinese economy, where the bankruptcy of giant Evergrande has sparked a wave of doubts about the country’s real estate system and weak growth, are making investors nervous.
But China is not the only cause for concern. But the minutes of the last Fed meeting have also raised some doubts about a stronger-than-expected tightening of monetary policy in the USA.
As for today’s key economic data, there is inflation in the Eurozone. The inflation rate in the euro zone moderated in July, falling to 5.3%, down two tenths from the previous month. As a result, the overall rate has reached a low not seen since January 2022. In contrast, core inflation has remained constant and has not fallen below 5.5%, according to Eurostat, the statistical unit of the European Community.
The comment of the day
“Rate increases have lowered inflation. We all hope that the tipping point is near, when banks will stop raising rates and start lowering them instead. Many analysts say that claiming victory means inflation needs to get closer to the 2% target, then this turnaround may occur; however, the three-year average inflation rate in the US and Europe is still 5%, possibly as much as 7% in the UK. For inflation to drop to 2% more sustainably, it must first fall below and stabilize at 1%—likely even lower given recent developments in the UK,” said Paul Doyle, director of large-cap European equities at Columbia Threadneedle.
