European Central Bank Vice President Luis De Guindos recently announced that the bank could revise upwards its previsions for the European economy in September, highlighting that the third-quarter economic indicators are positive.
"In a few days, the ECB will release its economic forecasts again, every time we have updated it has been for the better and this may happen again," commented De Guindos during a financial event sponsored by the European parliament and the European Commission. De Guindos predicted that the GDP of the Eurozone will advance by 4.5% this year.
This comment made Eurozone yields rise ahead of the upcoming Federal Reserve's annual symposium and above recent lows.
The announcement came after CESifo Group released its indicators on German business conditions. The Expectations Index, which attempts to measure business expectations for the next six months, stood at 97.5, lower than expectations of 100 and the previous month’s 101.
The Business Climate Index also was below expectations at 99.4 in August, after being at 100.7 in the previous month. Surveyed analysts predicte 100.4.
On the other hand, the Current Assessment Index stood at 101.4, higher than expectations of 100.8 and the previous month’s 100.4.
According to data released by the Federal Statistic Office, Germany's GDP managed to grow by 1.6 percent during the second quarter, mainly because the government decided to lift restrictions on economic and social life. The reopening of the economy made consumers begin spending the savings they hoarded during the pandemic. Another factor that helped the economy is the fact that the German government provided financial stimulus as an attempt to counter the effects of the pandemic on the country's economic performance.
Private consumption rose by 3.2% during the quarter, driving down the savings rate to 16%. In the same way, public consumption increased by 1.8%, causing the public deficit to account for about 4.7% of the GDP.
Since the beginning of the week, the euro has risen by 0.33% against the US dollar, recovering from the previous week's 0.81% losses. By 12:19 GMT, the euro dropped by 0.14% against the greenback, falling to the 1.1736 level.