The estimate for US third quarter GDP growth has been cut to 2.0 percent from 2.5 percent, according to a report on Tuesday from the Commerce Department. However, the cut was mainly due to a drop in business inventories. Excluding inventories, the economy grew at an unrevised 3.6 percent pace.
Unfortunately, the situation in Europe continued to deteriorate. On Tuesday, Spain sold three-month bills at an average yield of 5.11 percent, more than twice the 2.292 percent rate at the previous auction on 25 October. Belgium’s 10-year yield reached a nine-year high.
It is not just market confidence in eurozone sovereign debt that has declined. The European Commission reported on Tuesday that its consumer confidence index fell to minus 20.4 in November from 19.9 in October.
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