The UK’s final Q2 GDP reading was revised upwards from 0.8% to 0.9% q/q as the recovery continued to gain pace. Growth was largely fuelled by rapid expansion in the service sector and the revised data which showed that the economy passed its previous peak in Q3 2013 indicating that the UK economy rebounded from the financial crisis earlier than previously thought and stood well above its pre-crisis level at the end of Q2. Despite the bullish undertones the pound gave up more ground against the dollar, on track to ease against the greenback for the fifth straight session. Recent dollar strength owing to optimistic prospects for the US economy has seen the dollar index register its best quarter in six years as it hit a fresh four year high today, reaching 86.218 early on. The surging USD has seen the S&P 500 pull back slightly in recent sessions with the index hovering around the open at the time of writing.
European equity markets bounced back today with the majority of benchmark indices posting steady gains after stronger macro data for the eurozone encouraged risk appetite. German retail sales kicked off proceedings, posting a 2.5% m/m increase in August against expectations of a more modest 0.5% increase and the previous month's revised figure of -1.1%. Consumer spending in France was also on the up, growing 0.7% m/m in August against expectations of a -0.2% decline. Solid prospects for eurozone economics was welcomed with a side of caution as the eurozone unemployment rate for August came in at 11.5%, in line with expectations while the eurozone advanced core CPI reading slipped slightly from 0.9% to 0.7% y/y, both providing a strong indication that the euro nations were not out of the woods just yet.