The final figure of euro zone first quarter GDP confirmed the previous estimate, which showed a contraction by 2.5% Q/Q. The yearly figure was however slightly downwardly revised from -4.8% Y/Y to -4.9% Y/Y. Looking at the breakdown, government spending (0.2% Q/Q from 0.0% Q/Q) and investments (-4.1% Q/Q from - 4.2% Q/Q) were upwardly revised compared to the previous release, while both exports (-8.8% Q/Q from -8.1% Q/Q) and imports (-7.6% Q/Q from -7.2% Q/Q) were downwardly revised.
German industrial production grew by a much bigger than expected 3.7% M/M in May, while the previous figure was downwardly revised from -1.9% M/M to -2.6% M/M. The details show that the improvement was based in the manufacturing sector (5.1% M/M) with significant increases in capital goods (8.3% M/M) and intermediate goods (4.3% M/M), while consumer goods rose by a more modest 0.6% M/M. Both energy (-3.8% M/M) and construction (-3.2% M/M) declined significantly. This is the fastest pace German industrial production rose in nearly 16 years which bolsters hopes that Europe’s biggest economy is starting to recover.
Other: UK house prices decline again in June
In the UK, house prices dropped by 0.5% M/M in June, according to the Halifax house price index, while the consensus was looking for a slight increase. On a yearly basis, house prices are down by 15.0% Y/Y (from -16.3% Y/Y). The outcome is a bit disappointing after the significant increase in May and indicates that the UK housing market remains fragile.
