Comment: European Stock Markets Eye Eurozone GDP Data
February 14, 2014 7:09 am
European stocks ease a tad from the open although German and Italian equities register gains; US stock futures are currently softer; gold is up around 8 bucks whilst core governments bonds decline on the mild risk-on tone. In forex markets, USD and yen both register gains and euro in decent shape too. Overnight, Asian markets were mostly higher with the exception of the Japanese Nikkei 225, supported by gains on Wall Street on Thursday despite retail sales data from the US falling by more than expected and jobless claims rising.
Traders shrugged off the weak data, again attributing the softness to poor winter weather conditions. China’s inflation data was welcomed by the market, staying steady but PPI was disappointing – market participants have now built up a defence system to poor China data as the country goes through a major economic transformation. Friday’s session is packed with a bunch of high profile data points; out so far, German GDP for Q4 shows growth of 0.4%, above estimates of 0.3% with the annual rate of 1.4% - the pace of growth accelerated toward the end of the year as business and consumer confidence indicators ticked up and domestic demand was robust. Germany’s economic prospects for 2014 are bright with the country likely to be the engine of the growth for the euro zone recovery.
Surprisingly, the French economy expanded slightly faster than markets anticipated in Q4, growing 0.3% versus expectations of 0.2% – though the reading doesn’t instil enough confidence to suggest the French economy’s outlook is improving, it does paint a better picture of the economy as the improvement was broad-based across all facets of the economy. That said, high unemployment and lack of structural reforms due to the government’s inability to implement effective measures does mean that 2014 risks are to the downside for France. The overall euro zone GDP figure for Q4 is due shortly with market expectations of growth in at around 0.2%, a reading which will leave the market feeling rather unimpressed about the meagre growth of the euro zone and the growing downside risks.
Italian PM Letta is to tender his resignation today with Matteo Renzi, leader of the Democratic Centre Left Party to form a new government – financial markets so far are responding well to the news although if we hear of hiccups in the transition between leadership, things could change rapidly. In terms of any immediate changes, markets are not hopeful that a new government could suddenly implement an economic reform plan that could bear fruit in the near term but there are hopes that the fresh faced Renzi has the ability to turn things around. Later in the session, look out for US industrial production data followed by the University of Michigan consumer confidence report.
European stocks ease a tad from the open although German and Italian equities register gains; US stock futures are currently softer; gold is up around 8 bucks whilst core governments bonds decline on the mild risk-on tone. In forex markets, USD and yen both register gains and euro in decent shape too. Overnight, Asian markets were mostly higher with the exception of the Japanese Nikkei 225, supported by gains on Wall Street on Thursday despite retail sales data from the US falling by more than expected and jobless claims rising.
Traders shrugged off the weak data, again attributing the softness to poor winter weather conditions. China’s inflation data was welcomed by the market, staying steady but PPI was disappointing – market participants have now built up a defence system to poor China data as the country goes through a major economic transformation. Friday’s session is packed with a bunch of high profile data points; out so far, German GDP for Q4 shows growth of 0.4%, above estimates of 0.3% with the annual rate of 1.4% - the pace of growth accelerated toward the end of the year as business and consumer confidence indicators ticked up and domestic demand was robust. Germany’s economic prospects for 2014 are bright with the country likely to be the engine of the growth for the euro zone recovery.
Surprisingly, the French economy expanded slightly faster than markets anticipated in Q4, growing 0.3% versus expectations of 0.2% – though the reading doesn’t instil enough confidence to suggest the French economy’s outlook is improving, it does paint a better picture of the economy as the improvement was broad-based across all facets of the economy. That said, high unemployment and lack of structural reforms due to the government’s inability to implement effective measures does mean that 2014 risks are to the downside for France. The overall euro zone GDP figure for Q4 is due shortly with market expectations of growth in at around 0.2%, a reading which will leave the market feeling rather unimpressed about the meagre growth of the euro zone and the growing downside risks.
Italian PM Letta is to tender his resignation today with Matteo Renzi, leader of the Democratic Centre Left Party to form a new government – financial markets so far are responding well to the news although if we hear of hiccups in the transition between leadership, things could change rapidly. In terms of any immediate changes, markets are not hopeful that a new government could suddenly implement an economic reform plan that could bear fruit in the near term but there are hopes that the fresh faced Renzi has the ability to turn things around. Later in the session, look out for US industrial production data followed by the University of Michigan consumer confidence report.
Related Posts: