News that the UK economy collapse by a slightly less than feared 19.8% in Q2 vs -2.4% expected has been shrugged off. With covid cases rising a lockdown restrictions tightening, Q2 is well and truly in the rear-view mirror, with concerns growing over what Q4 could look like.
Housebuilders are in focus after the Nationwide housing index revealed that house prices jumped 5% YoY in September as the stamp duty holiday, pent up demand and people reassessing their housing situation in light of further lock down restrictions is sending demand soaring. This is most likely a false dawn as the end of stamp duty relief and rising unemployment over the coming months is likely to see demand dwindle and prices reset lower.
German retail sales surged more than expected in August, boosting hopes that consumer spending in Europe’s largest economy could help power a solid recovery following the coronavirus hit. Retail sales jumped +3.1% MoM after declining -0.2% in July. Retail sales are notoriously volatile, and this has only been exaggerated since covid. However, the data is undeniably a step in the right direction. EUR/USD has clawed back earlier losses and trades flat at $1.1740 whilst DXA trades -0.4% lower inline with its peers.
Boohoo raises full year guidance
Boohoo is a notable riser after reporting 51% increase in first half profits and raising its full year revenue guidance. The results come after the group vowed to address the issues raised in an independent review following allegations of poor pay and working conditions in its subsidiaries. After 45% surge in sales in Q1 its clear that the bad press hasn’t resulted in customers going elsewhere. The stock is trading -2.5% as investors book profits after a near 20% surge in the stock in less than a week.