Q1 EU GDP Figures Stick to 2.5% Unsurprisingly
No surprises in the final reading of Q1 EU GDP, which stays at the annualised rate of 2.5% while the quarter rose 0.4% - all unchanged from the previous readings. As such, this may serve as some near-term relief for EUR buyers today, who are again looking to push the single currency higher based on the renewed expectations of an announcement of an end of QE.
This was somewhat downplayed a few months back when the EU wide data was turning lower, and there is little sign that the slowdown in growth is fading, but more importantly, (EU) CPI is much higher and this is the governing council's primary mandate and will adjust policy accordingly.
The markets are also now pricing in a rise in the deposit rate back to flat by the end of next year, and this has also bolstered the EUR today, but there is a large element of corrective price action involved given the speed of the move lower which was as much USD led.
The crosses are holding their ground - notably, EUR/JPY trying to make some progress above 130.00, while EUR/GBP is also looking better bid amid ongoing internal squabbles on Brexit direction - pre 0.8800 looking very well offered though.