A string of economic indicators on Monday showed investors becoming more confident about the ongoing economic recovery, ignoring fears that new spikes from the coronavirus pandemic across the continent could demand a return to shares as total lockdowns.
– The sentiment of investors, calculated by the German Sentix group, rose for the fourth consecutive month and exceeded expectations, with sentiment to Germany bounced back faster than in other European Union countries.
The French central bank said on Monday that economic activity in July was 7% below the level it would have carried out without the pandemic, but added that recovery was on track and “in line with the expected trajectory last month.” It confirmed that France’s gross domestic product was up 14% in the second quarter.
The United Kingdom, which has reintroduced a 14-day quarantine for travelers from Spain, said it was monitoring the situation elsewhere in Europe. The government would “not care” to impose a similar measure on other countries such as France if the situation requires it, Chancellor of the Exchequer Rishi Sunak said over the weekend.
The view: Investor and business sentiment are likely to remain volatile over the coming months as fears arise, then recede, about the prospect of new closure measures. If uncertainty arises, all such investigations, often based on the mood of the moment, should be taken with a large pinch of salt. Actually hard data, on the other hand – such as third-quarter GDP to come later this week – needs to be taken more seriously, with the caveat that they do not say much about how the recovery will turn out: The behavior of both investors and consumers remains far too unpredictable.
.
