4th Quarter GDP Numbers for the Eurozone Provides Little EUR Comfort

It was a busy start to the day on the Eurozone economic calendar. Prelim January inflation figures from Spain and Eurozone GDP numbers for the 4^th quarter were in focus early in the European open.

The Eurozone Economy

In the 4^th quarter, the economy expanded by 0.3% following 2.2% growth in the previous quarter. Economists had forecast 0.3% growth. Year-on-year, the Eurozone economy grew by 4.6% after having expanded by 3.9% in the third quarter. Economists had forecast growth of 4.7%.

According to Eurostat,

Among member states with available data for the 4^th quarter:

• Spain (+2.0%) recorded the highest quarter-on-quarter growth followed by Portugal (+1.6%).
• By contrast, the economies of Austria (-2.2%), Germany (-0.7%), and Latvia (-0.1%) contracted in the quarter.

Spanish Inflation

According to prelim figures, Spain’s annual rate of inflation softened from 6.5% to 6.0% in January. Economists had forecast the annual rate of inflation to pick up to 6.7%. While softer, the prelim January numbers reflected persistent price pressures that have forced other central banks onto a hawkish footing

Market Impact

Ahead of today’s stats, the EUR had fallen to a pre-stat and current day low $1.11384 before finding support

EUR reaction to today’s stats were mixed, however. The EUR rose to a post-stat and current day high $1.11824 in response to Spain’s inflation figures. In response to the GDP numbers, however, the EUR rose to a high $1.11821 before falling to a low $1.11687.

At the time of writing, the EUR was up by 0.18% to $1.11679.

Next Up

Prelim German inflation figures for January ahead of January’s Chicago PMI. With the ECB in action on Thursday, expect Germany’s inflation figures to be key.