Banks

RBS share drop accelerates on stress test flop

Stressed. Shares in Royal Bank of Scotland have accelerated their losses this morning, falling over 4.5 per cent after the state-backed lender came in bottom of the heap in the Bank of England’s latest stress tests. RBS failed the toughest ever stress tests carried out by the BoE, with results this morning showing the lender’s […]

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Currencies

Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Financial

Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Property

Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Currencies

Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Categorized | Economy

Eurozone economy loses momentum, survey shows


Posted on September 23, 2016

©EPA

The eurozone’s recovery appears to have lost some of its steam, with an important measure of activity falling to its lowest level in more than a year-and-a-half in September.

The flash purchasing managers’ index for the single currency area fell to 52.6, from 52.9 in August, with the decline driven by a slowdown in the region’s dominant services sector. The index, compiled by data company IHS Markit, remains about the crucial 50 level that marks an expansion in activity.

    “While the underlying picture remains one of sluggish growth of close to 0.3 per cent over the quarter as a whole, it also remains clear that the economic upturn is still fragile and failing to achieve any real traction,” said Rob Dobson, senior economist at IHS Markit.

    The reading is the lowest in 20 months.

    Companies that performed well within the single currency area were lifted by stronger demand

    A separate index for manufacturing hit a three-month high, with companies in this area supported by strong orders for exports. Orders here hit their highest level for two-and-a-half years.

    [Results suggest] it is the domestic side of the economy that is slowing, more than the externally-orientated manufacturing sector

    – Dominic Bryant, senior European economist at BNP Paribas

    Service sector companies rely much more on demand from within the eurozone. Dominic Bryant, senior European economist at BNP Paribas, said the contrast in the results of the two sectors “suggests it is the domestic side of the economy that is slowing, more than the externally-orientated manufacturing sector”.

    Up until now the eurozone’s recovery has been driven mostly by strong domestic demand, with high levels of consumption supporting growth within the bloc.

    There was also a reversal in the fortunes of the eurozone’s two largest economies, France and Germany. The German economy, the region’s largest, has consistently outperformed France in recent years. But in September France recorded its highest reading since June 2015, while the German figure fell to a 16-month low.