The European GDP growth rate data came out overnight and was bleak, as expected. The EU economies are in the doldrums and operating in recession, despite some marginal tinkering to avoid the technical recession. German GDP growth contract 0.3% for Q4, while the EU contracted 0.1%. These are demonstrably terrible numbers and confirm the German economy is in a virtual state of de-industrialisation, especially considering the PMI data of recent times. The farmers strike across Germany and Europe will not serve to improve this dire economic situation, especially if extended. The bleak economic data will probably encourage the ECB to cut rates, assuming inflation spikes are temporary. US Jolts Job openings, increased more than expected, confirming the tight labour market continues, which only adds to pressure on the Fed to hold rates ‘higher for longer’. US markets keenly await the FOMC rate decision and commentary due to be delivered tonight. The EUR traded around 1.0830, while the GBP holds under 1.2700, ahead of the Bank of England rate decision.
The steady reserve kept the AUD below 0.6600, while the NZD rose to 0.6120, following a hawkish speech of the RBNZ Chief Economist. All markets keenly await tonight’s FOMC result and the various US jobs reports.
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