Eurozone: Strong yet slightly diminishing economic momentum - Rabobank

Sandeep Kanihama FXStreet Contributor

The Eurozone economy grew by 0.6% QoQ in Q3, following an upwardly revised 0.7% QoQ in Q2 as growth exceeded expectations, including that of our own, explains the analysis team at Rabobank.

Key Quotes

“Of the large Eurozone countries only France and Spain have published Q3 growth estimates so far; their economies grew by 0.5% and 0.8% respectively, a moderation of 0.1%-point from Q2 growth. In both countries domestic demand was the main growth driver.”

“Going forward, the higher than expected Q3 growth does not change our view of strong yet slightly diminishing economic momentum and moderately increasing headwinds. Mainly on the back of somewhat lower employment growth and pent-up demand, consumption growth is set to slow a bit in 2018. The stronger euro and weaker activity in the UK are expected to slightly temper export growth as well. That said, due to the higher than expected numbers for Q2-Q3, we are likely to ‘mechanically’ revise upwards our EZ GDP growth outlook for 2017 from 2.1% to 2.3%, and possibly from 2.0% to 2.1% in 2018, during our next forecasting round in November.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold remains below $5,200 despite tariff jitters and geopolitical risks

Gold is seen consolidating in a range below the $5,200 mark during the Asian session on Friday amid mixed cues. Trade jitters, along with the risk of a potential US-Iran war, act as a tailwind for the safe-haven bullion. Meanwhile, the Fed's hawkish outlook keeps the US Dollar close to the monthly high and caps the non-yielding yellow metal. Nevertheless, the commodity remains on track to register gains for the fourth straight week, though the fundamental backdrop warrants some caution for bullish traders.