Good morning and welcome to our continued coverage of the global economy, financial markets, the eurozone and business.
Today we discover how the European economy fared in the first quarter of 2021, in the face of the third wave of the Covid-19 pandemic.
And the latest news is that France’s economy has grown again, and faster than expected.
French GDP increased by 0.4% In the quarter from January to March, they show new figures recently published by the statistics body INSEE. Economists only expected a modest 0.1% growth.
That follows a 1.4% contraction in the last three months of 2020, as new lockdown restrictions hit its recovery.
INSEE reports that household spending increased 0.3% in the quarter (compared to a 5.7% drop in the fourth quarter), while “gross fixed capital formation” (business investment) was notably strong, growing 2.2%.
That’s an encouraging start to the year, suggesting that consumers and businesses performed better than previously thought this year.
However, the eurozone in general May They have still contracted in the last quarter, with ongoing lockdowns and a slow vaccination schedule hampering recovery.
That would put the eurozone in a double dip recession (as GDP contracted in the last quarter of 2020). We’ll find out at 10am UK time.
Michael Hewson from CMC Markets Explain:
Spain’s economy is expected to contract by -0.5%, after stagnating in the fourth quarter, with Italy set for a similar contraction of -0.5%, in addition to a -1.9% contraction in the fourth trimester. Germany’s economy is also expected to contract by -1.5%.
This set of numbers is expected to equal a -0.8% contraction in the first quarter of EU GDP, following a -0.7% contraction in the fourth quarter.
It will be a stark contrast to the United States, where GDP grew 1.6% during the first quarter of the year (we found out yesterday).
Rising vaccines, a massive round of government stimulus, and a steady recovery in the job market helped reverse some of the impact of the coronavirus pandemic, meaning the United States is expected to see solid growth this year.
Its tech giants are leading the charge, with Amazon reporting overwhelming numbers last night: Sales jumped 44% to $ 108.5 billion, while it made a profit of $ 8.1 billion for the quarter, $ 2.7 billion a month.
We also get new unemployment and inflation data from across Europe, which is likely to show that unemployment remained high in March, while prices rose this month.
Hewson again …
Unemployment levels are expected to remain stable at 8.3% for March, while the latest preliminary CPI figures for April point to another sharp rise, this time to 1.6%, from 1.3% in March.
This will inevitably fuel concerns about inflationary pressures in the euro area, given that the headline CPI has risen from -0.3% at the end of last year to current levels in less than four months.
With growth data from Mexico and Canada (for February) on the agenda, and UK house price figures, it could be a busy day …
- 6.30am BST: French GDP for the first quarter of 2021
- 7am BST: UK National House Price Survey
- 8 a. M. BST: Austria GDP for the first quarter of 2021
- 8:00 BST: Spanish GDP for the first quarter of 2021
- 9 a. M. BST: Germany GDP for the first quarter of 2021
- 9 a. M. BST: Italian GDP for the first quarter of 2021
- 10 a. M. BST: Eurozone GDP for the first quarter of 2021
- 10 a. M. BST: Eurozone inflation for April
- 10 a. M. BST: unemployment in the euro zone for March
- Noon BST: Mexican GDP for the first quarter of 2021
- 1.30pm BST: Canadian GDP for February
- 1.30pm BST: US PCE inflation report.
- 3pm BST: University of Michigan Consumer Opinion Survey