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 4th quarter were in focus early in the European open.
The Eurozone Economy
In the 4th 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 4th 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.