MNI: EUROZONE DATA: Preliminary Flash GDP (Q2........>

MNI: EUROZONE DATA: Preliminary Flash GDP (Q2 2019) Preview - 10:00 BST

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- Bloomberg Consensus: 0.2% q/q, 1.0% y/y; Prev (Q1): 0.4% q/q, 1.2% y/y

- Domestic demand resilience amid persistent global trade headwinds & policy

uncertainties to underpin a moderate expansion in Q2

- Q1 growth (+0.4% q/q) was bolstered by temporary factors, incl a spike in

exports to the UK (on Brexit stockpiling) & a weather-induced construction surge

- With these factors fading out, Q2 GDP to better reflect soft fundamentals

- Country data released so far shows that Q2 q/q growth moderated in France (to

0.2% from 0.3% in Q1), Austria (to 0.3% from 0.4%) & Belgium (to 0.2% from 0.3%)

- Forecasts suggest that both Germany & Italy could have contracted slightly in

Q2, while the pace of growth in Spain may have cooled marginally

- The big issue going forward is how much longer the services sector can

maintain its resilience in the face of a deepening industrial downturn

- With nascent signs of contagion already emerging, the ECB is no longer willing

to wait-and-see, with fresh policy stimulus in Sep looking like a done deal