The ECB statement and US unemployment claims will be out today. How the market will react?
Eurozone GDP surge in the first quarter speeds down to 0.4%
In the first quarter of this year the economy of up to 19 eurozone countries tacked on by 0.4%, according to preliminary data from the Statistical Office of the European Union.
The rate of surge turned out to be the weakest since July-September 2016. The slowdown in the surge of the European economy, which is largely connected with trade risks, definitely complicates the task of the European Central Bank, which is closely watching the prospects for cutting incentive measures. Compared with October-December 2016, the EU’s GDP managed to surge by 2.5%.
The growth rates of both indicators actually coincided with market hopes.
According to updated data, in the fourth quarter of the previous year, GDP in the euro area tacked on by 0.7% versus the previous three months and also by 2.8% year-on-year. Well in both cases GDP rallied by 0.1 percentage points more than previously uncovered (0.6% and 2.7% respectively).
Weakening of surge in January-March was also provoked by unfavorable weather conditions as well as other temporary factors.
The surge of exports speeded down, and some companies blame the strengthening of the common currency.
In France, GDP managed to tack on by approximately 0.3% in the first quarter after a leap of 0.7% in October-December. Secondly, in Austria there was a weakening from 0.9% to 0.8%. Then, in Belgium it inched down from 0.5% to 0.4%. Furthermore, Italy and Spain maintained the same surge rates as a quarter earlier: respectively 0.7% and 0.3%. Germany is anticipated to uncover a preliminary estimate of GDP surge in the first quarter on May 15, so it will show up on the same day with updated data on GDP dynamics in the euro zone.
In quarterly terms, economic surge in the euro area has been lasting for up to 20 quarters in a row.
The European Central Bank will publish the last statement of the year on December 10, at 14:45 MT time.
All attention on the market is on the Brexit process. Fears over the no-deal Brexit pushed the British pound deep down yesterday after UK Prime Minister Boris Johnson claimed he was ready to abandon negotiations.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.