United Kingdom’s GDP strengthens
The United Kingdom’s GDP rose by 2.0% on an annual basis in 1Q16—it met expectations. It was above the 1.8% growth witnessed in the previous quarter. On a quarterly basis, the economy rose by 0.4% in the first quarter—in line with the forecast and slightly below 0.7% growth in the previous quarter. The rise in GDP was primarily driven by a rise in consumer spending along with growth in exports. Investors would be looking at the performance of the United Kingdom’s economy in the coming quarters following the exit from the European Union.
The iShares MSCI United Kingdom ETF (EWU) rose by 2.7%, while the iShares Currency Hedged MSCI Eurozone ETF (HEZU) rose by 2.0% on June 30. EWU rose for the second consecutive session. The Vanguard FTSE Europe ETF (VGK) was also positive. It rose by 2.2% during the day.
GfK consumer climate remains unchanged at -1
The GfK consumer climate in the United Kingdom released at -1 for June—the same level as in May. However, it was better than the forecast of -2 even though consumers were slightly pessimistic about the overall economic sentiment. On an annual basis, business investment declined by 0.8% in the quarter ending in March—compared to a 3% rise in the previous quarter. On a quarterly basis, business investment fell by 0.6% in the quarter ending in March—compared to a fall of 2% in the previous quarter.
German retail sales rose by 2.6% in May
German retail sales rose by 2.6% in May on an annual basis—compared to a 2.7% rise in the previous month. It was below expectations of a 3.0% rise. On a monthly basis, retail sales in Germany rose 0.9% in May—higher than estimates of 0.7% growth and a contraction of 0.3% in April. The iShares MSCI Germany ETF (EWG) rose by 1.4% on June 30 while the iShares Currency Hedged MSCI Germany ETF (HEWG) rose by 1.5%.