- Euro area GDP growth was 0.3% q/q in Q4 increasing from 0.1% in Q3. This was in line with our forecast but slightly above consensus expectations of 0.2%. The higher growth in the euro area was broad based across core and periphery countries.
- The German economy grew a bit more than expected as growth was 0.4% q/q in Q4 (consensus and DBM 0.3%). Survey indicators in Germany have improved considerably and the slightly higher than expected GDP print confirms some of this. We look for German growth to pick up further this year.
- In France GDP growth was 0.3% q/q in Q4 (consensus and DBM 0.2%) while it was revised up to 0.0% from -0.1% in Q3. The underlying components were also released and even though some of the improvement was due to exports, household consumption and fixed investments were also higher. Hence, even though there is still a need for structural reforms in France, the improved sentiment across the euro area has started to help French domestic demand.
- The Dutch economy surprised on the upside as GDP growth was 0.7% q/q in Q4 while it was revised up to 0.3% from 0.2% in Q3. The improvement was mainly due to higher fixed investments as it rose 4.7% q/q. This is the third consecutive quarter of positive growth in fixed investments and in the Netherlands the improvement in sentiment has started to unleash pent-up demand in business investments. Moreover, house prices have stabilised after trending downwards, which has improved consumer confidence and resulted in slightly higher private consumption.
- The Spanish economy had the strongest growth rate of 0.3% q/q in nearly six years in Q4 and the Italian figure released today was 0.1% q/q in Q4, which is the first print above zero in two years. The Portuguese economy expanded 0.5% q/q in Q4, which was the third quarter in a row of positive growth.
- We look for a continued gradual improvement in the periphery countries as the return of confidence is expected to result in a slow recovery in domestic private sector demand this year. In our view, there is an upside risk to growth in the periphery as we expect pent-up demand in investments and durable consumer goods to boost growth, see more in our Periphery business cycle monitor.
- We expect GDP growth to be lifted to 1.3% this year (consensus 1.0%). The debt crisis has abated, sentiment has improved sharply and hard data is beginning to recover. Less headwind from fiscal tightening and tight credit conditions are important growth impulses this year.
Recommended Content
Editors’ Picks
EUR/USD stays weak near 1.0700 after German GDP data
EUR/USD is keeping the red near 1.0700 as investors await inflation and growth data for the Eurozone. The data from Germany showed that the GDP contracted at an annual rate of 0.2% in Q1 as expected, not allowing the Euro to attract investors.
GBP/USD remains pressured toward 1.2500 on US Dollar rebound
GBP/USD is extending losses toward 1.2500 in European trading on Tuesday. A cautious risk tone and a decent US Dollar comeback weigh negatively on the pair. The focus now shifts to mid-tier US data amid a data-light UK docket.
Gold price remains depressed near $2,320 amid stronger USD, ahead of US macro data
Gold price (XAU/USD) remains depressed heading into the European session on Tuesday and is currently placed near the lower end of its daily range, just above the $2,320 level.
BNB price risks a 10% drop as Binance founder and ex-CEO Changpeng Zhao eyes Tuesday sentencing
Binance Coin price is dumping, with the one-day chart showing a defined downtrend. While the broader market continues to bleed, things could get worse for BNB price ahead of Binance executive Changpeng Zhao sentencing on Tuesday, April 30.
Data fuels China optimism
China's factory activity has expanded for a second consecutive month, marking the best streak in over a year and fueling optimism for the sustainability of the world's second-largest economy's recovery.