In the Eurozone, we received several sets of early Q1 GDP figures. Quarterly growth forecasts in France, Spain, Italy, and Germany were all higher than expected. Meanwhile, the Eurozone aggregate number rose 0.3% in the quarter, versus a 0.2% projection.
There were also inflation figures, with the Eurozone core HICP rate falling to 2.7% in April from 2.9% (against a forecast of 2.6%).
In the United States, the Fed’s preferred pay indicator, the Employment Cost Index, performed better than expected in Q1, rising by 1.2% (against a forecast of +1.0%).
Currency-wise, the Eurozone GDP statistics gave some support for the euro. However, these advances were short-lived. Instead, the dollar has firmed during the last 24 hours.
This evening marks the end of the two-day US Fed policy making meeting. The general view is that interest rates should not be changed. Indeed, due to higher than expected inflation and recent hawkish Fed remarks, the first-rate decrease is not completely priced in until December.
Therefore, Chair Powell’s press conference will be closely analysed for guidance on the outlook for US rates.