The Day at a Glance | August 30 2021

The Top

*Consumer confidence fell in Europe during August (117.5) in light of concerns regarding supply chains and the virus`s revival.

*US crude oil producers in the Gulf of Mexico shut down production due to hurricane Ida.

*Inflation in Spain reached its highest level since 2012 (3.3% annual, Aug.); in Germany, inflation reached its highest level (3.4%) in 13 years.

*South African scientists revealed that there is a new variant of the virus that has a higher rate of transferability and is more resistant to antibodies.

Economic environment

Consumer confidence in Europe falls for the first time in a year. The European Commission published confidence indicators for the block`s economy, which logged decreases for the first time in a year after having reached historically high levels last month. The aggregate indicator on business and consumer sentiment receded to 117.5, a greater than expected decrease. The scarcity of inputs in the industrial sector, issues in transportation and growing prices continue to affect confidence in the manufacturing sector; while the virus`s new wave threatens the services sector. Consumers expressed greater concern regarding economic conditions and showed less willingness to carry out large purchases. Additionally, there was less optimism revolving around expected demand for businesses in the services sector for the following months. The phenomenon is paired up with increasing prices in the block`s economy after the most recent inflationary readings for August showed much higher than expected figures in Spain (3.3% vs 2.9%e.); meanwhile, prices in Germany increased as forecasts expected (3.4%), but they reached their highest level in 13 years – even though they were mostly boosted by energy prices. Timely inflationary forecasts for the entire European block will be made public tomorrow.