By Abdulselam Durdak
Frankfurt letter, week beginning Aug 22

- ECB Minutes: Governing Council waiting for further information

The European Central Bank (ECB) last week released the minutes of its monetary policy meeting held on July 21.

The minutes stated that although the outcome led to a significant decline in government bond yields, the overall consequences were so far less marked than many had anticipated.

According to the minutes, members widely felt that it was premature to discuss any possible monetary policy reaction at this stage, suggesting more time was needed to assess the incoming information over the coming months, although downside risks had clearly increased.

- Annual inflation up to 0.2 percent in the euro area and the EU

According to Eurostat figures - the statistical office of the European Union, Euro area annual inflation was 0.2 percent in July 2016, up from 0.1 percent in June. In July 2015 the rate was 0.2 percent.

European Union annual inflation was also 0.2 percent in July 2016, up from 0.1 percent in June. A year earlier the rate was 0.2 percent.

The annual rate remains well short of the European Central Bank's target of just below 2 percent.

- Euro area int. trade in goods sees surplus of €29.2 bn

The first estimate for euro area exports of goods to the rest of the world in June 2016 was €178.8 billion, a decrease of 2 percent compared with June 2015 (€182.8 billion). Imports from the rest of the world stood at €149.5 billion, a fall of 5 percent compared with June 2015 (€157.4 billion). As a result, the euro area recorded a €29.2 billion surplus in trade in goods with the rest of the world in June 2016, compared with +€25.5 billion in June 2015.

- News from Germany

Bundesbank said that the 'Brexit' would have limited impact on German economy in its latest monthly report on Monday.

Despite the ongoing intense debate on the economic impact of the British vote, the German companies' positive expectations were only slightly dampened, the bank said in the report.

And on the data side, employment continued to increase in the second quarter of 2016, according to provisional results of the Federal Statistical Office (Destatis).

The number of people in employment in Germany amounted to 43.5 million, which was again markedly above the previous year's level.

Compared with the second quarter of 2015, the number of people employed increased considerably by 529,000 or by 1.2 percent.

- The week ahead

This week, the markets will monitor the ECB's Governing Council Members' speeches in Germany.

The focus will be on detailed results of gross domestic product for the second quarter of 2016.


By Abdulselam Durdak

Anadolu Agency / Frankfurt am Main



22 Aug,2016