“After a 0.5% point contribution to Q3 GDP the Q4 Eurozone GDP report showed that inventories made a zero contribution. There was also a zero contribution from household consumption as well as government consumption expenditure with investment contributing a negative 0.2% points. The 0.1% growth for Q4 was largely led by exports which contributed 0.6% points but still less than the 1.1% contribution made during Q3 while imports made a less negative contribution of -0.3% percentage points compared to -1.0% in Q4.
Overall the data does little to inspire confidence that the “recovery” is self-sustainable and is reason enough to expect that the ECB will be very cautious in signaling that monetary tightening (refi rate hike) is the next natural step from a normalization of money markets. While we continue to see the ECB on hold this year there is the risk that they could be on hold until H2 2011. We will wait to see how the normalization goes but at this stage we are biased toward the lower for longer view on ECB rates.” – Divyang Shah, Reuters
FX Trading – A Full Opening Act … to Keep Traders’ Blood Flowing
February US Nonfarm payrolls are reported tomorrow. Typically it’s a snooze-fest in the markets for the 24 hours or so leading up to that report.
But the week’s been full of data points to give traders reason to stay awake.
…..read more HERE