The euro-zone contracted by 0.2% in Q1 2013 according to the initial, Flash estimate. The early estimations saw the euro-zone contract by 0.1% in Q1 2013. However, the market’s real estimations were lowered after the disappointing data from Germany. This is the third consecutive contraction in the euro-zone, which is in a deep recession. The year-over-year contraction is 1%. It was 0.9% last time.
EUR/USD was trading around 1.29 before the publication, after testing support at 1.2880. It is stable after the publication.
Germany reported a weak growth rate of only 0.1%, weaker than 0.3% that was expected. The euro-zone’s powerhouse barely escaped an official recession. The economy shrank by 0.7% in Q4 2012 (down from 0.6% initially reported).
France, the zone’s second largest economy, is now officially in a recession, after squeezing by 0.2% in Q1 and squeezing by the same rate in Q4. Italy’s economy lost 0.5% in Q1, a bit worse than 0.4% that was expected. This is the 6th consecutive drop in the euro-zone’s third largest economy.
The economy in the Netherlands squeezed by 0.1% in Q1 and 17% y/y.