Time | Country | Event | Period | Previous value | Forecast | Actual |
---|
06:45 | France | CPI, y/y | October | 2.2% | 2.5% | 2.6% |
06:45 | France | CPI, m/m | October | -0.2% | 0.3% | 0.4% |
07:00 | Switzerland | KOF Leading Indicator | October | 111 | 108.2 | 110.7 |
08:00 | Germany | GDP (YoY) | Quarter III | 9.8% | 2.5% | 2.5% |
08:00 | Germany | GDP (QoQ) | Quarter III | 1.9% | 2.2% | 1.8% |
08:30 | United Kingdom | Consumer credit, mln | September | 0.5 | 0.45 | 0.2 |
08:30 | United Kingdom | Mortgage Approvals | September | 74.2 | 70.95 | 72.6 |
09:00 | Eurozone | Harmonized CPI | October | 0.5% | | 0.8% |
09:00 | Eurozone | Harmonized CPI ex EFAT, Y/Y | October | 1.9% | 1.9% | 2.1% |
09:00 | Eurozone | Harmonized CPI, Y/Y | October | 3.4% | 3.7% | 4.1% |
09:00 | Eurozone | GDP (YoY) | Quarter III | 14.2% | 3.5% | 3.7% |
09:00 | Eurozone | GDP (QoQ) | Quarter III | 2.1% | 2% | 2.2% |
EUR fell against most of its major counterparts in the European session on Friday, weighed down by the European Central Bank’s (ECB) president Christine Lagarde’s pushback on financial market interest-rate expectations. Investors also assessed some recent data releases out of the Eurozone, which showed stronger-than-expected Q3 GDP reading and hotter-than-forecast October CPI print.
In the morning, Eurostat reported that the euro area’s GDP grew 2.2% q/q in the third quarter after expanding 2.1% q/q in the second quarter. Economists had forecast a 2% q/q gain for the third quarter.
On a y/y basis, the region’s economy grew 3.7% in the last quarter, markedly decelerating from +14.2% a quarter ago. Nonetheless, this exceeded economists' projection of an advance of 3.5% y/y.
In a separate report, Eurostat said that the Eurozone’s inflation is seen to rise 4.1% y/y in October after a 3.4% y/y climb in September. This marked the fastest pace since mid-2008 and was above the economists' forecast of 3.7% y/y and the ECB’s 2%-target.
The ECB’s president Christine Lagarde acknowledged yesterday that “inflation will take longer to decline than previously expected” but is still seen to “in the medium term below our 2% target”. She also stated that markets’ expectations for an interest rate hike next year were not in line with the Bank’s policy guidance, which suggests the ECB’s key rates to remain at their present levels until the Eurozone’s inflation is seen back at 2%-target by the middle of the projected period and set to hold there.
However, the latest growth and inflation data were interpreted by market participants as supportive for rate hikes next year. They are now pricing in a 10 basis point rate increase by July 2022 and another by next October.