020 7898 0500The main release from the eurozone yesterday was the year-on-year inflation reading for April. It was expected to hold steady at 1.3% but it surprisingly fell to 1.2%. The reading creates a problem for the ECB as it ponders whether to extend its quantitative easing programme beyond September. If it does, the euro might weaken as a result, but there is still time for things to turn around and it would be remiss to stick a flag in the ground at the moment.
Meanwhile, the EU Finance Commissioner, Pierre Moscovici, delivered a speech in which he struck a defiant tone and insisted that the eurozone’s economy will grow by 2.3% this year and 2% in 2019. Recent economic data releases from the eurozone haven’t exactly been exciting and there were fears that economic projections were too optimistic, but Moscovici appears to have no such concerns. We shall see.
Today is extremely busy for the eurozone, with a raft of PMI data from Germany and the eurozone. That should give us further indication of how the economy has been performing of late and the figures will be watched closely. We’ll also see the retail sales figures from the eurozone in March.
