Oil Price Recovers


"Oil rebounds after Bundesbank raises Germany's GDP-growth forecast."

Crude oil rebounds after the Bundesbank raised it forecasts on Germany's economic growth. European bourses also open higher following the upgrade and stronger-than-expected retail sales in the UK. The dollar strengthens against the euro and the yen amid Greece concerns and intervention talks. Gold remains firm, trading at around $1,230. Renewed worries over Greece's financial system may lift price higher.

The Bundesbank forecasts the country's GDP will expand by about +3% in 2010, up from June's projection of +1.9% percent it predicted in June. According to the central bank, the ‘growth tempo will normalize after the extraordinarily dynamic second quarter…But all in all, the fundamental economic situation in Germany is very favorable at the moment'. Regarding, the 2H10 outlook, the Bundesbank anticipated the economic upswing to continue with 'a continuation of moderate upward price developments.'

Investors' confidence was further supported by a UK report showing that retail sales grew +1.1% m/m in July following a +0.7% gain in the prior month. Meanwhile, the country's budget deficits narrowed to 3.17B pound in July, down from 5.52B pound the same period last year.

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