Market Drivers – European Session 12/9/2022

The UK economy grew during the month of July of 2022 by 0.2%, which came less than expectations that indicated a growth of 0.3%, to get the economy out of a contraction, it suffered in June when the economy recorded a contraction of 0.6%.

The services sector recorded an increase of 0.4% in July 2022 after declining by 0.5% in June. It was the main driver of GDP growth, as the information and communications technology sector grew by 1.5%, and was the largest contributor to the growth of services in July.

Industrial production recorded a decline of 0.3% after declining by 0.9% in June 2022, mainly due to a 3.4% decrease in the supply of electricity, gas, steam and air conditioning.

The construction sector also decreased in July 2022 by 0.8%, after a 1.4% decrease in June 2022.

Germany’s Ifo Institute announced on Monday that it revised its 2023 growth forecast to -0.3% from 3.5% in June. The institute further noted that the annual inflation expectation for 2023 was revised to 9.3% from June’s forecast of 6%.

The euro rose against the dollar during trading on Monday, by more than 1%, supported by reports that Ukraine had regained control of some lands from Russia, in addition to expectations that the European Central would continue to raise interest rates.

As reported by Bloomberg, Bundesbank President Joachim Nagel said that more obvious steps should be taken, such as raising interest rates last week, if the inflation picture remains the same.

The euro rose against the dollar by 1.29% to $ 1.0172 at 10:01 am Cairo time, at its highest level in more than three weeks.