Economic Data from France Fail to Impress the EUR

Economic data from the Eurozone was on the busier side this morning with the French economy in focus.

1^st Quarter GDP

In the 1^st quarter, the French economy contracted by 0.1% quarter-on-quarter, revised down from a prelim 0.4% expansion. In the 4^th quarter, the economy had contracted by 1.5%.

According to Insee.Fr,

• Households’ consumption expenditure rose by a modest 0.1% after having tumbled by 5.6% in Q42020. Compared with the final quarter before the pandemic, however, consumption was down 6.8%.
• Gross fixed capital formation (GFCF) increased by 0.2% after having fallen by 1.7% in the previous quarter. In the 4^th quarter of 2020, GFCF had risen by 1.7%.
• Trade had a negative impact on GDP, with imports up 1.1%, while exports fell by 0.2%. Compared with the pre-crisis 4^th quarter of 2019, imports were down 6.9%, with exports down 9.9%.

Household Consumption

In April 2021, consumer spending tumbled by 8.3%, month-on-month, versus a forecasted 0.4% increase. Consumer spending had fallen by 0.3% in March.

According to Insee.Fr,

• The slide was mainly due to an 18.9% slump in spending on manufactured goods, attributed to the 3^rd lockdown in April.
• Energy expenditure fell by a modest 0.6%, with food consumption declining by 0.2%.
• Spending was 9.5% below its average level in Q4 2019.

Inflation

According to prelim figures, the annual rate of inflation picked up from 1.2% to 1.4% in May. Month-on-month, consumer prices increased by 0.3%, following a 0.1% rise in April.

According to Insee.Fr,

• An acceleration in energy prices supported the pickup in inflationary pressure in May. Year-on-year, energy prices jumped by 11.8%.
• Prices for manufactured goods were estimated to be stable, while food prices are expected to decline. Food prices are estimated to fall by 0.2%.

Market Impact

Ahead of the numbers the EUR had risen to a pre-stat and current day high $1.21961 before sliding to a pre-stat and current day low $1.21716.

In response to data, the EUR fell to a post-stat low $1.21733 before rising to a post-stat high $1.21863.

At the time of writing, the EUR was down by 0.11% to $1.21824.

Next Up

Core PCE Price Index, personal spending, and consumer sentiment figures from the U.S.