Oil prices turn lower as Bessent says U.S. may have Iran deal "today or tomorrow"
Investing.com - The Eurozone economy expanded by more than anticipated in the second quarter, as the region dealt with pronounced fluctuations in oil prices driven by the Middle East conflict.
Growth in the 21-member currency area came in at 0.4% in the quarter ended in June, according to seasonally adjusted quarter-on-quarter figures from Eurostat, the European Union’s statistics agency.
The figure was an improvement from zero growth in the January-March period and faster than economists’ forecasts for growth of 0.2%.
On a country-by-country basis, growth in Germany’s economy, the Eurozone’s largest and traditional powerhouse, slowed to 0.2%, although that was partially offset by France expanding by 0.2%, accelerating from a contraction of 0.1% previously. Spain, whose booming economy has helped to recently bolster the Eurozone against broader headwinds, grew by 0.7%, up from a first-quarter reading of 0.6%.
Aiding Eurozone activity at the end of the second quarter was a framework ceasefire deal between the U.S. and Iran, which had pushed down once soaring oil prices to around pre-war levels. However, fighting has since reignited in the region, leaving Brent crude prices, the global oil benchmark, last hovering back above $92 a barrel.
Faced with the prospect of energy-fueled inflation in the Eurozone, markets are betting that the European Central Bank will opt to hike interest rates for second time this year in either September or October. Inflation is currently exceeding the ECB’s 2% target.
In theory, hiking rates can put a lid on inflationary pressures, albeit at the risk of weighing on broader growth.
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