Euro-zone inflation leaps to 1.8% y/y, GDP rises by 0.5%

0

Stronger than expected data from the euro-zone from (almost) all fronts. Headline inflation jumps to 1.8% and GDP growth rises by 0.5%. Also the unemployment rate provides good news with a drop to 9.6%. The only thing that did not surprise was core inflation which is still at 0.9%.

EUR/USD made a small move to the upside, but goes nowhere fast.

More data: Year over year GDP is up 1.8% against 1.7% expected. The previous GDP number was upgraded from 0.3% to 0.4% q/q.

The euro-zone published its initial CPI estimate for January as well as its first GDP print for Q4 2016. Headline inflation was expected to rise to an annual level of 1.6% in January up from 1.1%, mostly the effect of oil prices. Core inflation carried expectations  The unemployment rate was projected to remain unchanged at 9.8%.

EUR/USD was relatively stable throughout the day, holding on or even hugging the 1.07 level, but made a small advance ahead of the release.

The day began with GDP data from France, which showed a growth rate of 0.4%, exactly as expected. We then moved to inflation figures.

France’s initial CPI read for January showed a monthly drop of 0.2%, above -0.5% predicted. In Spain, the continent’s fourth-largest economy, we learned that prices leaped by no less than 3% year over year. A bump up in electricity bills is behind the move, as well as other energy prices.

In addition, Germany published its jobs report and it was excellent. The number of unemployed dropped by 26K, far better than 5K predicted. This was joined by a good revision to the previous month: a fall of 20K instead of 17K originally published. The unemployment rate in the continent’s largest economy dropped to 5.9%, also a positive surprise.

More: EUR/USD: Poor Performance Of Shorts To Stay For Some More Weeks – Barclays

Get the 5 most predictable currency pairs

About Author

Yohay Elam – Founder, Writer and Editor
I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me.

Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

Comments are closed.