Market participants had plenty of economic data to keep them busy today, with the release of Germany’s GfK consumer confidence index kicking off proceedings, as it came in slightly higher than expected at 8.9 for July. However, benchmark European equity indices ignored the positive premarket data release, opening sharply lower as fears of escalating violence in Iraq prompted a sell-off in risk assets and a flight to safe havens which saw eurozone bond yields fall on increasing demand. European equities remained under pressure throughout the entire session, with London’s blue chip index as well as the CAC and DAX indices closing lower.
In stark contrast US markets were trading higher despite a greater than expected downward revision to Q1 GDP, which contracted 2.9% q/q compared to expectations of a 1.8% contraction. Personal consumption also fell short of expectations in Q1, accelerating 1% against expectations of 2.4% growth. Both the S&P 500 and DJIA were trading between 0.2-0.3% higher at the time of writing despite the US economy contracting the most for five years, its worst drop since 2009. LME three month copper prices sold off below $6,850/tonne immediately after the release before recovering higher towards $6,920/tonne.