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German and French GDP missed market expectations

Friday, Aug 14 2015
The German economy continues to grow. In the second quarter of 2015, the gross domestic product (GDP) rose 0.4% on the first quarter of the year, missing forecasts on 0.5% rise. In a quarter-on-quarter comparison positive contributions were made mainly by the balance of exports and imports. According to provisional calculations, exports increased much more than imports, one of the reasons for this development being the weak euro. 
 
Both household final consumption expenditure and government final consumption expenditure continued to develop positively. However, growth was slowed by weak gross fixed capital formation. Compared with the first quarter, a decline in fixed capital formation was recorded especially in construction. Also, inventories were markedly reduced.
 
Separate report on French GDP showed no change in Q2. Analysts were predicting 0.2% incline. Household consumption expenditure decelerated sharply (+0.1% after +0.9%) while their total gross fixed capital formation (GFCF) decreased again (–1.6% after –1.1%). Non-financial corporations and general government investment also slowed down. Imports slowed (+0.6% after +2.2%) while exports accelerated (+1.7% after 1.3%). Conversely, changes in inventories contributed negatively: –0.4 points after +0.3 points in the previous quarter.
 
Euro is currently being traded few pointa above 1.1140 level. Pair is likely to find support around 1.11 handle and resistance above 1.1180 area. Later today, Italian and Eurozone GDP figures are scheduled for a
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