Eurozone Trade Data and Inflation Figures Fail to Deliver EUR Support

Finalized inflation figures and trade data for the Eurozone were in focus through the early part of the European session.

Trade

In June, the Eurozone’s trade surplus narrowed from €10.9bn to €7.5bn. Economists had forecast a widening to €16.4bn.

According to Eurostat,

• Exports to the rest of the world increased by 31.9% to €188.2bn year-on-year.
• Imports from the rest of the world jumped by 35.2% to €180.7bn, year-on-year.
• Intra-euro areas trade rose by 45.4% to €181.5bn when compared with May 2020.
• When compared with January-May 2020, euro area exports climbed by 13.3% to €957.9bn in the period January-May 2021.
• Imports rose by 12.7% to €878.2bn in January-May 2021, when compared with the same period in 2020.
• As a result, the trade surplus widened from €66.1bn to €79.7bn in the period January to May 2021, when compared with the same period in 2020.
• Intra-euro area trade increased by 20.5% to €867.6bn in January-May 2021 compared with the same period in 2020.

Inflation

In June, the Eurozone’s annual rate of inflation softened from 2.0% to 1.9%, falling below the ECB’s new 2% target rate.

The core annual rate of inflation softened from 1.0% to 0.9%.

According to Eurostat,

• A year earlier, the annual rate of inflation had stood at just 0.3%.
• Portugal (-0.6%), Malta (+0.2%), and Greece (+0.6%) registered the lowest annual rates of inflation.
• By contrast, Estonia (+3.7%) recorded the highest annual rate of inflation.
• In June, the highest contribution to inflation came from energy prices (+1.16 percentage points).
• Non-energy industrial goods (+0.31 pp), services (+0.28 pp), and food, alcohol, & tobacco (+0.15 pp) also contributed.

Market Impact

Ahead of today’s inflation figures, the EUR had fallen to a pre-stat and current day low $1.17971 before rising to a pre-stat and current day high $1.18197.

In response to today’s stats, the EUR rose to a post-stat high $1.18184 before falling to post-stat low $1.18136.

At the time of writing, the EUR was up by 0.05% to $1.18178.

Next Up

Retail sales and consumer sentiment figures are due out from the U.S. While both sets of numbers will draw interest, expect the retail sales figures to be key.