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With the gradual reduction in the fear of “Brexitâ€, investor confidence is gradually picking up. According to the latest data released by the German think tank European Economic Research Center (ZEW) on the 16th, Germany's investor confidence index returned to positive in August, at 0.5 points. In July, the index fell sharply by 26 points to minus 6.8, which was 2012. The lowest since the month. ZEW said that its index measuring the current economic situation in Germany also rose 7.8 points to 57.6 points in August, better than the market consensus; the index reflecting the economic confidence of the euro zone also rebounded from the negative 14.7 points in July to 4.6 points.
Although the index reflecting the confidence of German investors has rebounded sharply compared with July, it is still relatively low compared with the market forecast of 2 points, and there is still a big gap compared with the historical average of 24.2. ZEW chairman Achim Wambah said that the index is partially recovering from the impact of the UK's "Brexit" at the end of June, but the political risks inside and outside the EU are still affecting Germany's economic prospects; at the same time, the European banking industry is not facing Certainty is also picking up.
At present, the major stock indexes in Europe and the United States have recovered from the impact of the announcement of the Brexit results in the UK, and it also shows that the investor confidence has rebounded. Compared with the results of the UK “Brexit†announcement, the London Stock Market “Financial Times†100 stock average price index has risen 8.8%, Germany's Frankfurt stock market DAX index has risen 4.1%. The three major stock indexes in New York also closed at the same time on the 15th. Compared with the UK's Brexit results, the Dow Jones Industrial Average has risen 3.0%, the S&P 500 stock index has risen 3.1%, and the Nasdaq Composite has risen 6.4%.
After the Brexit, the world's major central banks have indicated that they will pay close attention to the UK's "Brexit" progress and its possible impact on the global economy. At present, many central banks are also more optimistic about the impact of the UK's "Brexit".
The German Federal Bank (Bundesbank) released a monthly report on the 15th that the German economy has grown steadily since the beginning of the year and has a good momentum of development. The third quarter is expected to continue to grow steadily under consumption. The report pointed out that the British "Brexit" has a limited impact on the German economy at least in the short term, and the weak British economy does not pose a major threat to the global economy.
New York Federal Reserve Bank Governor Dudley said on the 16th that as the US job market improves further and wages accelerate, the Fed is approaching the rate hike, and it is possible to discuss whether to raise interest rates at the September monetary policy meeting. Dudley said that the US economy performed well, consumption, personal income, and employment all maintained steady growth, and corporate investment may be weakened by the uncertainty of the election. He expects the US economy to perform better in the second half of this year than in the first half. Dudley said that the core inflation rate in the United States has been basically flat in recent months, but the gradual improvement of the economy is expected to promote further wage growth, and eventually the inflation rate will rebound. He said that the current market expectations for the Fed to raise interest rates are too low.
The Fed started its interest rate hike for the first time in nearly 10 years last December and has remained inactive since then. The Fed’s statement at the last meeting mentioned that the risk that the UK’s “Brexit†may pose to the US economy is a consideration. However, recent data shows that the US economic growth momentum is still stable. According to data released by the Federal Reserve on the 16th, driven by the sharp increase in manufacturing and public utilities output, US industrial production increased for the second consecutive month in July this year, the largest increase in 20 months.
However, the UK's “Brexit†issue will continue for several years and will still create huge uncertainties in the global economic growth prospects. The UK and the EU need to start consultations on how to establish new relationships between the two sides, and it is expected that there will be differences in consultations on key issues such as personnel turnover and EU single market access. According to British media reports, sources said that because the government department is not ready, the UK may not be able to trigger the exit clause at least until early next year, and will withdraw from the EU by the end of 2019.
The leaders of the 27 member states of the EU, including the United Kingdom, are scheduled to hold a summit on the "Brexit" issue on September 16. The summit will be well received by the outside world. European Council President Donald Tusk is expected to meet with German Chancellor Angela Merkel, French President Hollande and British Prime Minister Teresa May before the meeting. Tusk said that all EU leaders will be consulted before the summit.
Author: Wang Jing
There have been recent signs that investor sentiment is gradually weakening since the UK’s “Brexit†results hit the market at the end of June. However, the uncertainty brought about by the “Brexit†of the UK for the global economic growth prospects remains a concern. In September, leaders of the EU except the UK will hold a special summit on "Brexit". It is expected that the summit may release the EU's attitude on some key issues.