DAX 30 rallies, as EU commission updates growth forecast
The DAX 30 in Germany climbed to a new high during Thursday’s session, as the EU commission updated its economic growth forecast.
According to the Commission, GDP within the Eurozone will now grow by 5% in 2021, after initially forecasting a 4.3% rise in May.
In addition to this, it is now expected that inflation would reach 2.4% this year, which is up from 0.3% in 2020, and marginally higher than the ECB’s 2% target.
|💡 EU growth expectation |
Gentiloni praised the bloc’s €750 billion ($860 billion) recovery fund that already helped the economy to rebound from the shock of the pandemic.
At the same time, he warned of three “key threats to this positive picture” — the rise in new COVID-19 cases and low vaccination rate in some countries, the “rising inflation, driven largely by a spike in energy prices,” and supply-chain disruptions.
The inflation in the euro area is projected to peak at 2.4% this year, while the rise in prices will be slightly higher — 2.6% — in the entire bloc.
Shortly after today’s report, Vice President of the commission Valdis Dombrovskis stated that, “Our measures to cushion the blow of the pandemic and to ramp up vaccinations across the EU have clearly contributed to this success”.
EURUSD dropped to an intraday low of 1.1445 in the session, its lowest level since August last year.
Shares in Tesla were trading lower as of writing, as markets continued to react to the news that Founder Elon Musk had sold shares in the company.
Musk released filings which showed that he had sold roughly $5 billion of his stock in the company, days after twitter users voted for him to do so.
The sale is the first time since 2016 Musk has liquidated any shares in the EV maker and has resulted in a bearish week for the company.
This week’s selloff has seen Tesla lose close to $150 billion in market value, despite many retail traders still buying the dip.
As of writing, the selloff had slowed, with $TSLA trading 0.39% lower on the session.
GBPUSD nears 1-year low, as UK GDP disappoints
Data released from the United Kingdom on Thursday, reported that the nation’s GDP had grown less than expected in the last quarter.
Britain’s gross domestic product grew by 1.3% during the third quarter, which is 0.2% lower than the rate markets had expected.
Overall, GDP fell considerably below Q2’s 5.5% growth rate and comes as consumer spending slowed down during the summer months.
GBPUSD fell to an intraday low of 1.3359, which is the lowest rate for cable since December 20th, when a nationwide lockdown was announced in the UK.
Thursday’s lower pound story has however benefitted the FTSE 100, which closed 0.60% higher on the day.
“Do more of what works and less of what doesn’t.”– Steve Clark