Eurozone market update
The updated estimate of second quarter GDP confirmed that the Euro Area economy expanded by a modest 0.1% quarter-on-quarter, and by 1.4% on the year.
The data has been largely overlooked, however, given the tariff distortions that triggered an unusual jump in exports in the first quarter. Employment growth also ground to a near halt according to yesterday’s figures (+0.1% QoQ), pointing to early signs of a cooling in the bloc’s jobs market.
The euro dipped below the $1.165 level yesterday following the release of the US PPI report, but it appears well supported going into today’s US-Russia summit.
Trump appears to have anointed himself as the world’s peacemaker, and markets will be hoping for some positive news and signs of progress that suggests Russia is serious about reaching a ceasefire in Ukraine.
It will be a "feel-out meeting", however, and so the best that the euro can probably hope for is the promise of follow-up talks down the road.
Author
Matthew Ryan, CFA
Ebury
Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.
