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By: Stuart Cowell
Eurozone GDP rebounded 12.7% q/q in the third quarter, more than initially expected, but not a total surprise after German, French, Italian and Spanish numbers all surprised on the upside and after ECB head Lagarde already flagged the probability of a stronger number yesterday. Activity may have rebounded over the summer, but overall activity was still down -4.3% compared to the level a year ago. At the same time, virus developments and renewed lockdowns are casting a dark shadow over the outlook with the risk of a double-dip recession pressuring governments and the ECB into adding further stimulus.
European stock markets have pared early losses, but remain mostly in negative territory, as risk appetite was hit yesterday by fresh concerns over the outlook for the tech sector after reports from the likes of Amazon.com Inc and Apple Inc weighed on markets. iPhone sales and Twitter user growth missed estimates, and while US futures are also up from overnight lows, the USA100 future is still down -1.2%. Disappointing company reports out of Europe added to the cautious backdrop and GER30 and UK100 is currently up 0.4% after paring some of their earlier losses, with the prospect of additional ECB easing helping. The Spanish IBEX stabilized after selling off yesterday and the French CAC 40 is also fractionally higher on the day.
Asian markets meanwhile closed with broad losses. Topix and Nikkei declined -2% and -1.5% respectively, the Hang Seng was also down 2% at the close, the CSI 300 -1.6%, and the ASX -0.6%. The front end USOil future meanwhile is currently trading at $36.20 per barrel and Gold futures change hands at $1874 per troy ounce.
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