Soggy growth across the board

Japan needs an American dentist
This morning's papers allege that the National Health Service issued 211,200 prescriptions for donuts, custard creams, Bakewell tarts and suchlike last year. In total the NHS spent £116 million on comfort food for its patients. The policy is to let them eat cake. In Japan it's humble pie.

At least it looks like that, especially for Prime Minister Abe whose expansionary economic policies are still failing to deliver the hoped-for growth. Unveiled three years ago, Abe San's "three arrows" of fiscal stimulus, monetary easing and structural reforms were supposed to get the Japanese economy back on track after two decades of stagnation and deflation. They still haven't. Figures released this morning showed gross domestic product shrinking by -0.4% in the second quarter.

The yen was strangely unmoved by the news, probably because investors had expected an even worse number. Japan's currency is down by just a third of a yen from Friday's opening level, leaving a weekly loss of two yen.

Euroland wallowing too
The second quarter GDP figures from the euro zone on Friday were nowhere near as shaky as the Japanese data but they did not make good reading. Quarterly growth in Euroland as a whole slowed to 0.3% and just about every national reading fell short of forecast.

Growth in France was zero and Italy managed a 0.2% expansion while the economies of Germany, Portugal and Greece (!) grew by 0.4%. The Greek figure was widely believed to be an aberration, caused by consumers bringing forward expenditure on cars and other capital goods as a precaution against Grexit and a return to the drachma.

The euro was the weakest among the major currencies, falling by more than a cent against sterling. It was kept company by the Norwegian krone as oil prices headed towards new six-year lows. Sterling was the top performer, closely followed by the US and antipodean dollars. Other than a reasonable 0.6% increase in US industrial production there was nothing particularly to help the leaders; they simply kept their noses clean.

Slow start
With Japanese GDP done and dusted there is nothing else on the day's agenda with any wave-making potential. It looks as though it will be a slow start to the week, not least because half the market is on holiday.

Swiss retail sales are forecast to have fallen by -0.6% in June. The New York Federal Reserve's manufacturing index is pencilled in at 5.0, which would be a slight improvement on the month. America's NAHB Housing Market Index of the residential construction sector is supposed to show a one-point improvement, up from 60 to 61. The Euroland trade figures come out this morning and after lunch the States and Canada report on international investment flows.

The week ahead holds a reasonable degree of promise, with inflation data from Britain and the United States and UK figures for retail sales and public sector borrowing. Today, however, holds very little.