One need not be well versed in the art of reading entrails or posses any other kind of unworldly powers to see that the Eurozone economy may be about to head off over the cliff. Now, just as the Q1 GDP figure was something of a technical glitch due to the forward pushing of investment which made Germany ride an impressive 1.5% reading q-o-q, so is the corresponding Q2 figure likely to be a similar (negative) glitch. The only important question is the extent of the slowdown since without that we really cannot build any sound forecasts for an annual growth rate of the Eurozone not to speak of Germany itself.

Yet, we move beyond the immediate excitement of the upcoming GDP release and the extent to which it will have vultures gathering over an increasingly weak economy, the forward looking indicators also turned an abysmal showing. Consider then the following: In Italy, business confidence slumped to the lowest level in seven years; in France, it clocked in at the lowest since 2005 and in Germany the ever so important (for ECB policy that is) IFO survey declined to a three year low.

But the show does not, by any means of the phrase, stop here. Adding to the gloom we also got the PMI release today showing its lowest reading since 2001.

Furthermore, in Spain where it isn't the proverbial Rome but moreso Madrid (or perhaps the Cedulas?) that are burning, an already groggy economy got some additional blows in the kidneys (see also below) as we learned how secondary inflation rose to an all time highs at one and the same time as the economy shed jobs in Q2 to move into double digit territory with respect to the unemployment rate.