German Economy Recession Bound | US Consumer Confidence Data Due
Published August 27, 2019
The second reading of German Q2 GDP showed that a collapse in exports is weighing enough on the country’s economy to push it to contraction territory. This supports the market expectation that GDP will shrink by around 0.25% in Q3, easing the German economy into a technical recession.
The Richmond Fed Manufacturing Index is due this morning. Expectations are for its first improvement in six months with a 10 point gain to -2 in August. The index hit a high of 14 back in February but has since declined to -12. The Conference Board’s Consumer Confidence Index is expected to have given back some of its July gains, dropping to a still-strong 129 level in August.
Market participants are markedly confused by President Trump’s latest trade threats. Yesterday’s rally was driven by optimism following comments made by the president at the G-7 meeting, but this positivity has somewhat faded today as it becomes increasingly unclear whether any call from China happened over the weekend at all.
OPEC has reached a conformity level of 159% in July 2019, according to the Joint Ministerial Monitoring Committee meetings taking place throughout the day. The JMMC noted the overall conformity of 159% in July 2019 was 22 percentage points higher than in June 2019. This high level has offset uncertainty in the market due to ongoing economic growth concerns.