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Eurozone avoids technical recession as flat Q4 GDP
The Euro Area economy stagnated in the last quarter of 2023, following a 0.1% contraction in the previous three-month period, as persistently high inflation.
Eurozone GDP stagnates in Q4; Germany contracts by 0.3%, while Spain and Italy see modest growth
Pound dips below $1.26; May rate cut possible, with June delay likely
Japanese officials push back as yen weakens past 150 per dollar
Eurozone economy stagnates in Q4
The Euro Area economy stagnated in the last quarter of 2023, following a 0.1% contraction in the previous three-month period, as persistently high inflation, record borrowing costs, and weak external demand continued to exert downward pressure on growth. Among the bloc's largest economies, Germany contracted by 0.3%, primarily due to weakness in the industrial sector, while France's GDP stalled. In contrast, economic growth in Spain and Italy accelerated to 0.6% and 0.2%, respectively. Additionally, the Dutch GDP expanded by 0.3%, marking the end of a three-quarter period of contraction. Compared with the same quarter of the previous year, the Eurozone economy advanced by a meager 0.1% after showing no growth in the third quarter. Looking at the full year of 2023, the GDP grew by 0.5%, marking a sharp decline from expansions of 3.4% and 5.9% in 2022 and 2021, respectively.
The ECB needs more evidence inflation is returning to its goal before it can loosen policy, Luis de Guindos said. He pointed out risk factors including rapid wage growth, elevated corporate profit margins and geopolitical tensions.
UK inflation rate remains steady at 4%
UK inflation was softer than expected, sending the pound below $1.26 and providing some relief for the BOE. Headline CPI was 4.0% in Jan, in line with December. Core inflation was also slower than anticipated. May rate cut remains in play, but there’s risk it’ll be delayed to June.
Japanese officials react to Yen's dip below 150 per Dollar
Intervention watch. The yen weakened past 150 per dollar for the first time since November, prompting pushback from Japanese officials. The country’s top foreign exchange official Masato Kanda said speculative moves “aren’t desirable.”
