Germany (0.8%) and Spain (0.4%) positively stood out while the Netherlands (1.4%), France (0%) and particularly peripheral countries (Italy -0.1%, Greece -1.1% and Portugal -0.7%) reported red figures.
This news didn’t help and neither did political instability in Greece, rumours going round about taxes on Greek debt investment and French decree to increase the government’s right to block foreign takeovers. This mix brought about profit withdrawals and moves to German bonds, that firmly rose debt spreads and peripheral debt profitability (10-year Spanish bond got back to 3% and 171 basis points spread). Inflation figures, however, gave some room to breathe.
Analysts take the ECB’s acting in June for granted. Accordingly, Link highlights that “mild growth and low inflation make nearly unavoidable unconventional measures from Draghi”. What’s more, they point out “it’s no good showing signs to get away, without delivering”. Region economic situation is bad and evolution is under forecast, maybe harmed by Ukraine’s conflict. Analysts expect soon a second situation assessment to reconsider asset choice.
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