Data from Germany improves despite recession woes

Eurozone data in focus, oil prices dip

By Nadia Elbilassy | @Nadia Elbilassy | 3 July 2023

Market open
  • Eurozone retail sales expected to be in the green territory today

  • Germany's factory orders showed improvement compared to the significant decline observed in the previous month

  • Commodities retreat, Gold prices take a step back to $1960 and WTI dips to $71

Eurozone data in line

Retail sales from the Eurozone is expected to be released in the next few hours with expectations of 0.2% vs -1.2%.

Meanwhile Germany factory orders dropped to -0.4% vs the significant drop it saw earlier last month of -10.9%. Despite Germany entering a recession as headlined last week, data seems to be critical at this point as investors assess the health of the economy and investigate how long it will take to recover especially with an aggressive policy stance in place.

Moreover, Christine Lagarde signaled more rate hikes to come. The European Central Bank (ECB) is also scheduled to hold a meeting next week. Lagarde mentioned that it is premature to conclude that core inflation has reached its highest point, despite observing indications of a slowdown or moderation in inflation.

European stocks are expected to open lower on renewed sour sentiment over mixed data.

Oil prices retreat

On Tuesday, oil prices experienced a slight decline, partially reversing the substantial gains from the previous session. Traders shifted their focus back to the deteriorating economic conditions in the United States following the production cut by Saudi Arabia.

Over the weekend, Saudi Arabia, the leading global exporter of oil, made a commitment to implement an additional production cut of approximately one million barrels per day starting from July. This reduction will be compared to the production levels observed in May. The aim behind this move is to support and increase the declining prices of crude oil.