It was a positive day for the eurozone yesterday, as economic sentiment figures came in much better than expected, almost 31 points above forecasts. However, in a reminder of the unpredictability of the currency markets, there was little movement from the euro, which is still constrained by optimism helping to strengthen the pound.
Nonetheless, the ECB’s Yves Mersch sounded a cautionary note at the start of the week, saying that ‘the longer the weakness in manufacturing persists, the greater the risk that other sectors of the economy will be affected.’
German inflation has just come in this morning at 1.1%, in line with market expectations. Tomorrow, we will also see German GDP growth rate, which is thought to still be in the negative this quarter, albeit just holding above zero year-on-year. EU growth is expected to come in, too, at around 1.1%.
