Key Economic Data Points to Further 0.25% Hikes in May

Eurozone Market Update

With no April meetings for the ECB, BoE or Federal Reserve, the focus shifted to economic data points critical to central bank monetary policy. Euro area Q1 GDP growth of 0.1% slightly missed market expectations of 0.2%. Germany’s GDP print was flat as public and private consumption contracted while investment and export contributed positively to growth. In April, Germany had 7.2% inflation and France had 6.9% inflation, slightly below market expectations of 7.3% and 6.7%, respectively. The eurozone’s growth continued to pick up, with April’s flash composite Purchasing Managers’ Index (PMI) coming in at 54.4 thanks to robust consumer demand, and with the services PMI improving to 56.6. EU industrial production growth of 1.5% also surpassed market expectations of 1%.

Euro Short Term Rates

_{Source: Bloomberg, data as at 28 April 2023}

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