According to Tinsa (independent Spanish property valuation company), House prices in Spain rose 3.6% year on year in May, falling in line with a gradual contraction in growth since the end of 2018, when average prices were growing at close to 6%.

Housing data can be used by investors as a precursor to gauge the health of an economy and may bring volatility to the currency in question as a result.

Interestingly, the release follows yesterday’s key employment data from EuroStat, which also showed a slight slowdown in number of employed people across the eurozone, with a meagre increase of just 1.1% (year on year).

A contracting jobs and housing market could spell a lack of consumer spending further down the line, which is unlikely to sit well with the markets in a time when Europe is struggling to find a footing internationally as a result of the US-China standoff. Any more indications of a weakening domestic market could bring further volatility to euro exchange rates in the long run. It will be interesting to see if this is reflected in Monday’s Consumer confidence release. If you would like to be updated, make you may wish to get in touch with your account manager well in advance.

Will the European Central Bank follow expectation?

Eurozone growth slows in Q2

Speaking of the domestic market in the spotlight, yesterday’s key GDP release for the Eurozone will have done very little to stimulate investor appetite in the euro. Both the year on year and the quarter on quarter release showing little to no growth at 1.1% and 0.2% respectively.

Importantly, as expected Germany’s GDP reading showed a contraction at 0.1% which holds weight with the markets given Germany is the leading economy of the eurozone.

The release completely outshone France’s unemployment rate falling to the lowest levels since before the 2008 crisis which just goes to show how concerned the markets are with the situation Germany now finds itself in.

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