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| Eurozone growth rises to 0.5%, but inflation surges to 1.8% – business live | Eurozone growth rises to 0.5%, but inflation surges to 1.8% – business live |
| (35 minutes later) | |
| 12.09pm GMT | |
| 12:09 | |
| Peter Navarro’s attack on Germany over the euro shows that the Trump administration are concerned about countries who run a trade surplus with the US. | |
| Speaking on Bloomberg TV a moment ago, Citigroup global econonomics director Ebrahim Rahbari says that “talking about a currency is much easier than taking specific measures”. | |
| Currency rates have clearly been under discussion for some time, at forums such as the G20, Rahbari points out. | |
| So Navarro is “ratcheting up the discussions that have previously taken place”, he concludes. | |
| 11.51am GMT | |
| 11:51 | |
| FT: Trump’s top trade adviser accuses Germany of currency exploitation | |
| Hold onto your hats, folks. | |
| The Financial Times is reporting that one of Donald Trump’s advisors has hit out at Germany, saying it gets an unfair advantage due to the weakness of the euro. | |
| Here’s the story, by the FT’s Shawn Donnan: | |
| Germany is using a “grossly undervalued” euro to exploit the US and its EU partners, Donald Trump’s top trade adviser has said in comments that are likely to trigger alarm in Europe’s largest economy. | |
| Peter Navarro, the head of Mr Trump’s new National Trade Council, told the Financial Times the euro was like an “implicit Deutsche Mark” whose low valuation gave Germany an advantage over its main partners. His views suggest the new administration is focusing on currency as part of its hard-charging approach on trade ties. | |
| In a departure from past US policy, Mr Navarro also called Germany one of the main hurdles to a US trade deal with the EU and declared talks with the bloc over a Transatlantic Trade and Investment Partnership dead. | |
| Here’s the full story: | |
| Trump’s top trade adviser accuses Germany of currency exploitation | |
| The euro is now rising sharply against the US dollar, as traders anticipate action from Washington over this issue. It’s gained almost 0.5% to €1.074. | |
| Dollar is trading lower in the wake of these comments: Trump trade adviser accusing Germany of manipulating currency https://t.co/2qu7sxB4Qi | |
| 11.30am GMT | 11.30am GMT |
| 11:30 | 11:30 |
| Eurozone data splurge: What the experts say | Eurozone data splurge: What the experts say |
| Here’s some early reaction to the news that eurozone growth and inflation have risen, while the unemployment rate has hit a new seven-year low. | Here’s some early reaction to the news that eurozone growth and inflation have risen, while the unemployment rate has hit a new seven-year low. |
| Michael Hewson of CMC Markets: | Michael Hewson of CMC Markets: |
| In the Eurozone GDP figures have been released this morning. Inflation in Spain has increased to 3% as has the cost of living in France, up by 1.4%; while the broader EU CPI measure jumped to 1.8% largely driven by a jump in energy prices. | In the Eurozone GDP figures have been released this morning. Inflation in Spain has increased to 3% as has the cost of living in France, up by 1.4%; while the broader EU CPI measure jumped to 1.8% largely driven by a jump in energy prices. |
| The French economy grew 1.1% in 2016 slightly less than expected but despite this Michel Sapin, the French minister of finance, insisted the French economy is still moving in the right direction and reducing unemployment. | The French economy grew 1.1% in 2016 slightly less than expected but despite this Michel Sapin, the French minister of finance, insisted the French economy is still moving in the right direction and reducing unemployment. |
| Overall, Eurozone GDP came in at 0.5% for the last quarter which was better than forecast and unemployment fell. All this positive data suggests the Eurozone is recovering slowly, though Italy continues to remain a weak point. | Overall, Eurozone GDP came in at 0.5% for the last quarter which was better than forecast and unemployment fell. All this positive data suggests the Eurozone is recovering slowly, though Italy continues to remain a weak point. |
| Anna Stupnytska, global economist at Fidelity: | Anna Stupnytska, global economist at Fidelity: |
| #Eurozone headline inflation accelerates, big surprise in #Spain and #France. Good for #EUR. Decision time for #ECB #Draghi ahead. pic.twitter.com/GOgAfPX0Ho | #Eurozone headline inflation accelerates, big surprise in #Spain and #France. Good for #EUR. Decision time for #ECB #Draghi ahead. pic.twitter.com/GOgAfPX0Ho |
| In 2016 #Eurozone #economy grew faster than #US, for the first time since the crisis. #Trump #Brexit #ECB #BOE #Fed pic.twitter.com/XPSmxeHTl1 | In 2016 #Eurozone #economy grew faster than #US, for the first time since the crisis. #Trump #Brexit #ECB #BOE #Fed pic.twitter.com/XPSmxeHTl1 |
| Alex Lydall, Head of Dealing at Foenix Partners, | Alex Lydall, Head of Dealing at Foenix Partners, |
| A fresh and intricate new conundrum has reared its ugly head for Mario Draghi this morning as the pressure of a significant uplift in German inflation has pushed the Eurozone figure up to 1.8% for January. | A fresh and intricate new conundrum has reared its ugly head for Mario Draghi this morning as the pressure of a significant uplift in German inflation has pushed the Eurozone figure up to 1.8% for January. |
| The renown ‘powerhouse’ of the Eurozone is now putting significant pressure on the ECB President as euro-sceptics are quickly pointing out that stimulus measures are falling far short of creating a balanced and improved bloc state. Whilst GDP saw an uplift this morning, as well as a diminishing Unemployment rate also posted, inflation has, and will be for the foreseeable future, the focus. | The renown ‘powerhouse’ of the Eurozone is now putting significant pressure on the ECB President as euro-sceptics are quickly pointing out that stimulus measures are falling far short of creating a balanced and improved bloc state. Whilst GDP saw an uplift this morning, as well as a diminishing Unemployment rate also posted, inflation has, and will be for the foreseeable future, the focus. |
| With such wild swings upwards, Draghi will have to adopt Monetary policy accordingly, which at present isn’t hugely clear as to what path he should, or is willing to take. Many analysts suggest Quantitative Easing is falling far short of improving the economic situation, and Draghi always notes ‘other tools’ which he can, and will adopt - perhaps now is the time for him to lay his cards on the table, so to speak. | With such wild swings upwards, Draghi will have to adopt Monetary policy accordingly, which at present isn’t hugely clear as to what path he should, or is willing to take. Many analysts suggest Quantitative Easing is falling far short of improving the economic situation, and Draghi always notes ‘other tools’ which he can, and will adopt - perhaps now is the time for him to lay his cards on the table, so to speak. |
| Neil Wilson of ETX Capital: | Neil Wilson of ETX Capital: |
| The ECB has been wont to point out that core inflation remains a problem and the uptick in prices might not last. And again this remains stubbornly below the headline figure at just 0.9%. | The ECB has been wont to point out that core inflation remains a problem and the uptick in prices might not last. And again this remains stubbornly below the headline figure at just 0.9%. |
| No cause for the ECB to tighten monetary policy just yet but refreshingly upbeat figures nonetheless. The data is improving in Europe but there is as yet no sign of anything other than monetary policy divergence between the Fed and European Central Bank. Greece’s debt problems won’t go away and political risks are abundant. | No cause for the ECB to tighten monetary policy just yet but refreshingly upbeat figures nonetheless. The data is improving in Europe but there is as yet no sign of anything other than monetary policy divergence between the Fed and European Central Bank. Greece’s debt problems won’t go away and political risks are abundant. |
| 10.59am GMT | 10.59am GMT |
| 10:59 | 10:59 |
| The eurozone didn’t manage to match Britain’s economy, though. | The eurozone didn’t manage to match Britain’s economy, though. |
| UK GDP grew by 0.6% in the last three months of 2016, and by 2.2% during the year. | UK GDP grew by 0.6% in the last three months of 2016, and by 2.2% during the year. |
| 10.45am GMT | 10.45am GMT |
| 10:45 | 10:45 |
| The eurozone outperformed the United States last year. | The eurozone outperformed the United States last year. |
| Today’s growth figures show that the eurozone expanded by 1.8% in 2016; last Friday, we learned that America only grew by 1.6%. | Today’s growth figures show that the eurozone expanded by 1.8% in 2016; last Friday, we learned that America only grew by 1.6%. |
| This is the first time the Eurozone has grown faster than the US in a calendar year since 2008, when the financial crisis struck. | This is the first time the Eurozone has grown faster than the US in a calendar year since 2008, when the financial crisis struck. |
| Updated | Updated |
| at 11.20am GMT | at 11.20am GMT |
| 10.32am GMT | 10.32am GMT |
| 10:32 | 10:32 |
| Eurozone unemployment falls: the details | Eurozone unemployment falls: the details |
| Eurozone politicians will be delighted to see the region’s jobless rate fall to 9.6% (not 9.8% as I mistyped earlier, sorry). | Eurozone politicians will be delighted to see the region’s jobless rate fall to 9.6% (not 9.8% as I mistyped earlier, sorry). |
| This is the lowest rate recorded in the euro area since May 2009. | This is the lowest rate recorded in the euro area since May 2009. |
| The jobless rate across the European Union came in at 8.2%, unchanged from November, and the lowest since February 2009. | The jobless rate across the European Union came in at 8.2%, unchanged from November, and the lowest since February 2009. |
| The lowest rates were recorded in the Czech Republic and Germany, while Greece suffered the worst jobless rate (23.0% in October 2016) followed by Spain (18.4%). | The lowest rates were recorded in the Czech Republic and Germany, while Greece suffered the worst jobless rate (23.0% in October 2016) followed by Spain (18.4%). |
| There are still 20.065 million men and women out of work in the EU, including 15.571 million in the euro area. | There are still 20.065 million men and women out of work in the EU, including 15.571 million in the euro area. |
| And young people are still finding it hard to find work; in December 2016, the youth unemployment rate was 18.6% in the EU28 and 20.9% in the euro area, compared with 19.5% and 21.8% respectively in December 2015. | And young people are still finding it hard to find work; in December 2016, the youth unemployment rate was 18.6% in the EU28 and 20.9% in the euro area, compared with 19.5% and 21.8% respectively in December 2015. |
| 10.24am GMT | 10.24am GMT |
| 10:24 | 10:24 |
| Important point: eurozone core inflation (which strips out food and energy) was only 0.9% this month, rather than the headline figure of 1.8%. | Important point: eurozone core inflation (which strips out food and energy) was only 0.9% this month, rather than the headline figure of 1.8%. |
| That’s little comfort to households facing a cash squeeze, but it does give the European Central Bank a good reason not to be bounced into changing monetary policy. | That’s little comfort to households facing a cash squeeze, but it does give the European Central Bank a good reason not to be bounced into changing monetary policy. |
| Julien Lafargue, European equities strategist at JP Morgan, explains: | Julien Lafargue, European equities strategist at JP Morgan, explains: |
| “Headline inflation is clearly picking up in the Eurozone, but a lot of that is linked to energy price base effects (+8.1% compared with +2.6% in December). As highlighted in their most recent press conference, the ECB itself is willing to look through these transient gains. | “Headline inflation is clearly picking up in the Eurozone, but a lot of that is linked to energy price base effects (+8.1% compared with +2.6% in December). As highlighted in their most recent press conference, the ECB itself is willing to look through these transient gains. |
| As such, we believe that it is too early to call for any sort of further “tapering” in the region, especially ahead of a very busy political agenda. | As such, we believe that it is too early to call for any sort of further “tapering” in the region, especially ahead of a very busy political agenda. |
| The eurozone's headline inflation rate is at a 4-year high but core inflation is still lagging behind. https://t.co/eB5pQv6Z0T pic.twitter.com/csR7WN8nXR | The eurozone's headline inflation rate is at a 4-year high but core inflation is still lagging behind. https://t.co/eB5pQv6Z0T pic.twitter.com/csR7WN8nXR |
| 10.18am GMT | 10.18am GMT |
| 10:18 | 10:18 |
| Growth up, inflation up, unemployment down.... | Growth up, inflation up, unemployment down.... |
| The Euro Area economy right now. pic.twitter.com/1xzCmF443V | The Euro Area economy right now. pic.twitter.com/1xzCmF443V |
| 10.07am GMT | 10.07am GMT |
| 10:07 | 10:07 |
| On an annual basis, the eurozone grew by 1.8% last year - up from 1.5% in 2015. | On an annual basis, the eurozone grew by 1.8% last year - up from 1.5% in 2015. |
| Euro area GDP +0.5% in Q4 2016, +1.8% compared with Q4 2015: preliminary flash estimate from #Eurostat https://t.co/8krAFeAw45 pic.twitter.com/yyci1wEQU7 | Euro area GDP +0.5% in Q4 2016, +1.8% compared with Q4 2015: preliminary flash estimate from #Eurostat https://t.co/8krAFeAw45 pic.twitter.com/yyci1wEQU7 |
| 10.05am GMT | 10.05am GMT |
| 10:05 | 10:05 |
| Eurozone growth jumps to 0.5%; inflation leaps | Eurozone growth jumps to 0.5%; inflation leaps |
| My Reuters machine is gasping for air as a burst of newsflashes ripple out from the eurozone, giving new insights into the European economy. | My Reuters machine is gasping for air as a burst of newsflashes ripple out from the eurozone, giving new insights into the European economy. |
| New growth figures show that the euro area grew by 0.5% in the last three months of 2016, up from 0.4% in the previous quarter. | New growth figures show that the euro area grew by 0.5% in the last three months of 2016, up from 0.4% in the previous quarter. |
| That’s an encouraging sign, suggesting the region’s recovery is picking up pace. | That’s an encouraging sign, suggesting the region’s recovery is picking up pace. |
| But inflation has jumped by more than expected, to 1.8% in January. That’s the highest in almost four-years, driven by a steep rise in energy prices. | But inflation has jumped by more than expected, to 1.8% in January. That’s the highest in almost four-years, driven by a steep rise in energy prices. |
| Euro area inflation up to 1.8% in January 2016; the highest since February 2013: see flash estimate from #Eurostat https://t.co/X0q2tkKeDb pic.twitter.com/C3KvvIEnqn | Euro area inflation up to 1.8% in January 2016; the highest since February 2013: see flash estimate from #Eurostat https://t.co/X0q2tkKeDb pic.twitter.com/C3KvvIEnqn |
| The European Central Bank’s target is to keep inflation just below 2% - these figures are surely going to fuel calls for the ECB to stop its bond-buying stimulus programme, and consider pushing interest rates up. | The European Central Bank’s target is to keep inflation just below 2% - these figures are surely going to fuel calls for the ECB to stop its bond-buying stimulus programme, and consider pushing interest rates up. |
| And the unemployment rate across the region has dropped to 9.6% in December | And the unemployment rate across the region has dropped to 9.6% in December |
| Wow - Eurozone inflation jumps to 1.8% in Jan, near ECB target of 2%. Unemployment also at seven year low - @AFP | Wow - Eurozone inflation jumps to 1.8% in Jan, near ECB target of 2%. Unemployment also at seven year low - @AFP |
| Details and reaction to follow.... | Details and reaction to follow.... |
| Updated | Updated |
| at 10.28am GMT | at 10.28am GMT |
| 9.47am GMT | 9.47am GMT |
| 09:47 | 09:47 |
| The latest unemployment news from Italy is rather disappointing. | The latest unemployment news from Italy is rather disappointing. |
| The Italian jobless rate came in at 12% in December, higher than expected, while November’s reading has been revised up from 11.9% to 12%. | The Italian jobless rate came in at 12% in December, higher than expected, while November’s reading has been revised up from 11.9% to 12%. |
| These are the highest readings since July 2015. | These are the highest readings since July 2015. |
| 9.23am GMT | 9.23am GMT |
| 09:23 | 09:23 |
| Dollar on track for worst January since 2008 | Dollar on track for worst January since 2008 |
| The US dollar is poised to suffer its worst start to any year since 2008. | The US dollar is poised to suffer its worst start to any year since 2008. |
| The greenback has fallen by 1.9% against a basket of currencies this month, partly thanks to yesterday’s selloff as Donald Trump’s flurry of executive orders alarmed traders. | The greenback has fallen by 1.9% against a basket of currencies this month, partly thanks to yesterday’s selloff as Donald Trump’s flurry of executive orders alarmed traders. |
| The pound, for example, has gained over 1.5 cents against the US dollar this month, from $1.233 to $1.25. | The pound, for example, has gained over 1.5 cents against the US dollar this month, from $1.233 to $1.25. |
| Kit Juckes, currency expert at Societe Generale, says it’s very hard to know how the markets will react to Trump. | Kit Juckes, currency expert at Societe Generale, says it’s very hard to know how the markets will react to Trump. |
| President Trump’s travel ban - and his associated decision to fire the acting Attorney General - dominates sentiment and remains good for Treasuries, the yen (and gold), but bad for bonds and the dollar. | President Trump’s travel ban - and his associated decision to fire the acting Attorney General - dominates sentiment and remains good for Treasuries, the yen (and gold), but bad for bonds and the dollar. |
| How long will market sentiment to be affected? How far can the dollar and yields fall on this? I’m not sure serious analysis is possible, and I don’t trust my gut instincts on something as far from the usual state of affairs, but my bias is still that we’ll get back to the Trump economic program, and the implications for Fed policy, before too long. | How long will market sentiment to be affected? How far can the dollar and yields fall on this? I’m not sure serious analysis is possible, and I don’t trust my gut instincts on something as far from the usual state of affairs, but my bias is still that we’ll get back to the Trump economic program, and the implications for Fed policy, before too long. |
| More prosaically, markets will focus on the US jobs data due Friday. | More prosaically, markets will focus on the US jobs data due Friday. |
| 8.59am GMT | 8.59am GMT |
| 08:59 | 08:59 |
| German unemployment rate falls to 5.9% | German unemployment rate falls to 5.9% |
| Newsflash: Germany’s jobs market remains as strong as ever. | Newsflash: Germany’s jobs market remains as strong as ever. |
| The unemployment total in Europe’s largest economy has fallen again this month, by 26,000 people, to 2.605m. | The unemployment total in Europe’s largest economy has fallen again this month, by 26,000 people, to 2.605m. |
| That takes Germany’s jobless rate down to 5.9%. | That takes Germany’s jobless rate down to 5.9%. |
| *GERMAN JAN. UNEMPLOYMENT FALLS ADJUSTED 26,000; EST. 5,000 DROP | *GERMAN JAN. UNEMPLOYMENT FALLS ADJUSTED 26,000; EST. 5,000 DROP |
| *GERMAN JAN. ADJUSTED JOBLESS RATE AT 5.9%; EST. 6.0% | *GERMAN JAN. ADJUSTED JOBLESS RATE AT 5.9%; EST. 6.0% |