Tariffs, sanctions turmoil may overshadow EU, German growth

BERLIN: U.S. tariffs and sanctions policies are likely to keep investors on their toes in the coming week as European politicians and policymakers continue their summer break, while economic data from Germany and the euro zone will also be in focus.

Washington´s latest sanctions on Russia have battered the rouble, and Turkey´s lira has been hammered by concern that Ankara is sliding into a full-blown economic crisis. U.S. President Donald Trump´s determination to push ahead with sanctions on Tehran that also target foreign companies doing business with Iran has opened another battle front in addition to a much broader dispute over trade tariffs.

German business associations have warned that companies are increasingly suffering from Trump´s sanctions policies - including those against Iran - as well as the tariffs he is imposing in an escalating tit-for-tat trade conflict with China.

"In terms of geopolitics, the trade war between the U.S. and China could enter centre stage again next week," ING economist Carsten Brzeski said.

"Also, keep an eye on Turkey, where some kind of IMF involvement is getting closer." Turkey´s lira has plunged to record lows on concerns about President Tayyip Erdogan´s influence on monetary policy and increasingly authoritarian rule, and about a diplomatic rift with

Washington over Ankara´s detention of several Americans including an evangelical pastor.

On the data front, Germany on Tuesday will be the last of the large euro zone economies to publish an estimate for gross domestic product (GDP) in the second quarter.

Analysts polled by Reuters expect the quarterly growth rate to pick up to 0.4 percent from 0.3 percent in the first quarter, suggesting that Europe´s largest economy is humming along despite the uncertainty caused by U.S. tariffs and sanctions.