After a very quiet start to the trading week on Monday for fundamental news on the economic calendar Tuesday kicked off in earnest with a raft of numbers which overall has painted a mixed picture for the Eurozone.  First up were the German unemployment figures which came in better than expected at 31k against a forecast of 44k but significantly worse than last month which recorded a net change of 7k.  As a result German unemployment rose to its highest level since June 2007 taking the jobless rate from 8.2% to 8.3%.   This is now Germany’s worst recession since the end of the second world war and as a result has led to an increase of 14% in insolvencies during the first half of the year.  This was followed by the M3 money supply which again painted a gloomy picture overall as demands for loans slowed further and banks tightened their credit policies.  The data came in at 3.7% against a forecast of 4.6%  and a previous of 4.9%.  This group of data was rounded off with private loans which again showed a decline in demand.

The next release for Europe was the CPI Flash Estimate which measures the change in the price of goods and services purchased by consumers and whilst this was marginally better than expected at -0.1% versus a forecast of -0.2% this was the first time that European consumer prices had recorded an annual decline raising once again the spectre of deflation.  Finally a minor news release was the Italian preliminary CPI which showed a similar picture.

Moving to the US we have three items this afternoon of which the last is the most important, the CB Consumer Confidence, yet another in a long line of consumer sentiment indices of which this is considered a leading indicator of consumer spending.  The forecast is for 55.4 against a previous of 54.9 and should this be achieved sentiment and consumer confidence is apparently improving.  Prior to this release we have two minor diffusion indices, the first is Chicago PMI Data based on a survey of purchasing managers in Chicago and the second is a composite index of house prices from Standard & Poor’s.

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