Euro Area inflation holds steady, economy shows resilience in Q1 2024

Euro Area

In April 2024, preliminary estimates reveal that the annual inflation rate within the Euro Area held steady at 2.4 percent, aligning with projections from market analysts. Meanwhile, the core inflation rate, a pivotal metric that excludes the influence of volatile food and energy prices, moderated to 2.7 percent, down from the previous month's 2.9 percent.

During the first quarter of 2024, the Eurozone's economy exhibited a notable expansion of 0.3%, marking its most robust growth since the third quarter of 2022. This surpasses earlier forecasts of a marginal 0.1% uptick and signifies a resurgence following subdued performances observed since the fourth quarter of 2022. This outcome presents an opportunity for the European Central Bank to exercise restraint in implementing extensive rate cuts throughout the year, particularly if inflationary pressures persist beyond initial predictions. Additionally, when compared to the corresponding period in the previous year, the Eurozone's GDP demonstrated a growth of 0.4%, exceeding market projections of 0.2%. This upturn follows two consecutive quarters of 0.1% expansion.

Japan

Recent accounts from the Bank of Japan indicate probable intervention in the foreign exchange market on the preceding day, with reported purchases totaling approximately ¥5.5 trillion. However, officials refrained from confirming their involvement. Consequently, the currency experienced a weakening trend, receding beyond the 157 yen mark against the dollar during U.S. trading hours.