According to consumer expert at GfK, Rolf Bürkl, “the exceptionally high levels of consumer confidence among German consumers have significantly contributed to preventing a recession in Germany in the third quarter.” Rolf Bürkl added: “Consumers are therefore optimistic about the upcoming holiday season, one of the busiest times of year for a number of retail industries such as consumer electronics and toys. How the year as a whole will be evaluate is determined during this period. And the retail sector can certainly look forward to this period with a healthy dose of optimism.”
Meanwhile, the pound came under pressure as the latest election polls showed the Conservative lead is narrowing ahead of next month’s vote.
Kantar’s survey (published today) showed that Labour caused the Tories’ lead to fall from 18 points to 11 over the past week.
Added to this, an ICM poll for Reuters from Monday showed that Boris Johnson’s party had a seven-point lead against Jeremy Corbyn’s Labour, down from a 10-point lead just a week earlier.
However, many analysts believe that Mr Johnson is headed for victory despite the polls, and commenting on this, SEB’s fixed income and FX strategist, Lauri Hälikkä said: “The pound has strengthened as a reassuring Tory majority would mean that the risk of hard Brexit is small while avoiding political lock-ups in Parliament and getting a growth-oriented economic policy.”
If the Conservative lead narrows further, Sterling could slump against the euro as the week continues.