The latest Eurozone GDP growth figures will be carefully monitored, for any further signs that growth is weakening.
On Thursday January 31st at 10:00am U.K. time, the latest data relating to the Eurozone’s GDP growth and performance will be released, by the official stats agency, Eurostats. The current annual GDP growth rate (up to Q3 2018) is 1.6%. The forecast, according to the economists polled by the Reuters news agency, is for a fall to 1.2% growth annualised, for the final quarter of 2018. The actual quarter on quarter figure is expected to come in at 0.2% for the E.Z., identical with the third quarter reading of 2018.
The E.Z. GDP figures will accompany the latest Italian GDP data, the forecast is for a fall in the annual rate of growth for Italy, down to 0.3% from 0.7% in Q3. The anticipation is for the actual Q4 quarter on quarter figure to come in at -0.1%, matching the previous quarter’s negative growth figure. Analysts and traders will be carefully watching the Italian data for any evidence that the economy may be approaching recession which, by European standards, is generally classed as two successive quarters of negative growth.
GDP figures are one of the most highly anticipated, high impact calendar events, due to their ability to move the FX markets when published. If the forecasts are met, both series of GDP data, relating to the E.Z. and Italy, would indicate a softening of the single currency bloc’s economy, in the final six months of 2018. As a consequence the value of the euro could come under focus, particularly if the figures beat, or miss expectations. Even if the forecasts are met, speculation in the euro could still intensify, if collectively the market participants have failed to price in the falls in GDP.
Unemployment figures for both the E.Z. and Germany will be published in the morning, the prediction is for the German unemployment rate to remain unchanged at 5%, with the Eurozone unemployment rate remaining unchanged at 7.9%.
Either side of the data releases relating to the Eurozone, two officials from the E.C.B. will deliver speeches and hold talks, one official from the central bank in Cape Town South Africa, the other in Luxembourg. Although ranking as low impact calendar releases, both speeches will be monitored carefully, given that growth in several key E.Z. economies is now beginning to reduce. The speech in Cape Town may also cover aspects of how the E.Z. plans to create new trading opportunities, through potential funding, with the South African government.
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