Europe Is A Big Zero

The 18-country euro area showed 0.0% GDP growth in Q2, down from 0.2% in Q1 and worse than the 0.1% expected by economists.

This follows disappointing GDP reports from Germany, which declined by 0.2%, and France, which showed no growth.

"The poor figure is chiefly driven by downside surprises in Italy, France and Germany which all failed to grow in the second quarter," noted Pantheon Macroeconomics' Claus Vistesen. "On an annualised basis, eurozone growth is now running at a disappointing 0.4% in the first half of this year."

This follows disappointing inflation reports, which showed that price growth remain unusually low in the region.

"Output levels at mid-year suggest the growth forecasts of the European Central Bank's economists are already overestimating the recovery's pace," said Bloomberg economists Maxime Sbaihi and Niraj Shah. "This adds pressure on the central bank to launch an asset purchase program."

Earlier this month, Italy stunned markets by reporting that its GDP unexpectedly fell 0.2% in Q2, falling short of expectations for 0.1% growth. Germany had already published horrific sentiment, industrial production, and factory orders reports over the past two weeks.

Yet today's reports managed to miss economists' already lowered expectations. Following the reports, traders and investors moved out of stocks and into bonds, sending Germany's 10-year yield below 1.0% for the first time ever.

Here's a breakdown of GDP growth in the region via Eurostat.