Investor sentiment in Germany increased more than expected in August.
A report released on Tuesday by the European Center for Economic Research (ZEW) based in Mannheim, Germany showed that hopes remained high that Europe’s largest economy is on the way to recovery after the devastation caused by the coronavirus pandemic.
The ZEW economic sentiment survey on investors’ sentiment rose from 59.3 points in the previous month to 71.5. Economists’ surveys had a median estimate of 58.0.
“Hopes for a speedy economic recovery have continued to grow,” said ZEW President Achim Wambach after the report was released.
However, the situation looked much more pessimistic about the current conditions. The figure from -80.9 in the previous month dropped to -81.3 points. Expectations were towards -68.8 points.
The German economy shrank 10.1% in the second quarter due to the COVID-19 outbreak, seeing its biggest contraction after Germany’s unification.
Hopes for a rapid economic recovery continued to grow, Wambach said. “But the assessment of the situation is slowly improving, experts expect to see an overall improvement, especially in domestic sectors, according to individual evaluations of the industries,” he added.
“However, the still very poor earnings expectations for the banking sector and insurers regarding the coming six months give cause for concern,” he said.
Unemployment in the UK
Unemployment in Britain unexpectedly remained at 3.9% in June. However, the Office of National Statistics stated that more people gave up looking for work and were therefore not considered unemployed, and 300,000 who said they worked but were not paid were also not added.
The number of people working in the UK has experienced its biggest decline since 2009. As the conservative Boris Johnson government eases its massive job protection plan, there are mounting signs that the coronavirus will have a more severe impact on the labor market.
According to official figures released on Tuesday, 220,000 people lost their jobs in the three months to June. Separate tax data for July showed that the number of employees on companies’ payroll has decreased by 730,000 since March, alerting the potential for a much larger increase in unemployment.
Finance Minister Rishi Sunak said government support programs worked, but job losses were inevitable.
“I’ve always been clear that we can’t protect every job, but … we have a clear plan to protect, support, and create jobs to ensure that nobody is left without hope,” he said.
US economic aid talks
Following the controversial executive actions taken by US President Donald Trump to help the economy, especially the extension of unemployment allowances at the weekend, the partisan dispute on the issue continues in Congress.
The Senate Majority Leader, Republican Mitch McConnell, who did not participate in the negotiations, accused the Democrats of pursuing trillions of dollars to save states and cities “badly managed” by the Democrats.
Senate Minority Leader, Democratic Chuck Schumer, who led the negotiations with Speaker of the House of Representatives Nancy Pelosi, said Democrats were ready to talk again if the Republicans compromise. The fifth aid package negotiations, which lasted two weeks, collapsed last Friday.
“Democrats are ready to return to the table,” said Schumer. “We need the Republicans to join us there and meet us halfway.”
Treasury Secretary Steven Mnuchin, representing the White House at the talks, said he has not met with Pelosi or Schumer since Friday, but wanted to do so.
Taiwan or the new Hong Kong
Taiwan’s Foreign Minister, Joseph Wu warned that Communist China was trying to turn Taiwan into a new Hong Kong following a Tuesday meeting with the US Secretary of Health Alex Azar, the top American official who has visited the island since 1979.
As the Chinese Communist Party (CCP) began implementing a comprehensive national security law aimed at democratic elections, freedom of expression and press in Hong Kong last month, opposition politicians have now been disqualified from elections, democracy activists arrested for expressions or symbols they used, and anti-CCP books began to be taken off from library shelves.
The CCP’s step in Hong Kong caused alarm in the self-governing Taiwan of 23 million, as Beijing considers the island its territory and promised to seize it one day, by force if necessary.
Taiwan’s air defense systems were activated when communist Chinese warplanes briefly violated the sensitive air border in the middle of the Taiwan strait during Azar’s visit.