EUROZONE DATA: Q1 GDP Flattered By Rounding, Irish Exports
Apr-30 10:56
As we suspected, the Eurozone flash Q1 GDP release was flattered by rounding, coming in at 0.352% unrounded. That’s still well above the 0.2% projected by consensus and the ECB, but the data was nonetheless skewed by tariff-front loading, particularly in Ireland. Sentiment data points to weak growth momentum in Q2, as US tariffs start to kick in and associated uncertainty continues to weigh.
- Irish GDP rose 3.2% Q/Q, with the stats office noting that “this was driven by an increase in the multinational dominated sectors in Q1 2025 with a more modest increase in the domestic sectors”. Irish February goods trade data showed a 211% Y/Y increase in exports to the US, which largely comprised of medical and pharmaceutical products - an obvious indication of front-loading amongst major US Pharma companies based in Ireland.
- Ireland contributed 0.11p to the Eurozone-wide quarterly reading, despite only making up 4% of total GDP.
- Across the four major economies, detailed information on the Q1 data is lacking. However, we note that domestic demand appears to have been a positive contributor in Germany, Spain and Italy, while net trade was a negative contributor to France and Italy. Net trade was not mentioned in the German press release, suggesting a flat/negative contribution there too.
- Summarising the main quarterly GDP prints released yesterday/this morning:
- Eurozone: 0.4% Q/Q vs 0.2% cons, 0.2% prior.
- Germany: 0.2% Q/Q vs 0.2% cons, -0.2% prior.
- France: 0.1% Q/Q vs 0.1% cons, -0.1% prior.
- Italy: 0.3% Q/Q vs 0.2% cons, 0.2% prior.
- Spain: 0.6% Q/Q vs 0.7% cons, 0.7% prior.
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OUTLOOK: Price Signal Summary - Gold Bulls Remain In The Driver's Seat
Mar-31 10:50
- On the commodity front, the trend condition in Gold is unchanged, it remains bullish. Today’s strong gains highlight a bullish start to this week’s session and confirm a continuation of the primary uptrend. The rally also once again, highlights fresh all-time highs for the yellow metal. Sights are on the $3151.5, a 3.000 projection of the Nov 14 - Dec 12 - 19 price swing. Support to watch lies at $2992.4, the 20-day EMA. A pullback would be considered corrective.
- In the oil space, despite recent gains, a bearish trend condition in WTI futures remains intact, and gains this month are considered corrective. However, a key resistance at $69.17, the 50-day EMA, has been pierced. The breach strengthens a bullish theme and opens $70.98, the Feb 25 high. For bears, a reversal lower would expose the bear trigger at $64.85, the Mar 5 low. Clearance of this level would resume the downtrend and open $63.73, the Oct 10 ‘24 low.
EQUITIES: Stoxx 50 Futures Move Closer To Next Support
Mar-31 10:44
Euro Stoxx 50 futures see a more convincing break below 5,200.00 at the second time of asking.
- Nothing much in the way of a fresh headline catalyst to drive the latest leg of the sell off, with early NY reaction to overnight price swings perhaps factoring in.
- Oil has pulled back from session highs, another potential factor aiding the move.
- The break below 5,200.00 obviously deepens the bearish technical threat in Euro Stoxx 50 futures. Next support seen at the Feb 4 low (5,160.00).
US TSYS: Risk-Off Start To Quarter-End
Mar-31 10:43
- Treasuries have been confined to relatively tight ranges since opening markedly higher in Japan trading, reflecting broad risk-off flows on a combination of tariff concerns ahead of April 2 "Liberation Day" and geopolitical fears
- Goldman Sachs for example have marked up their 12-month US recession probability from 20% to 35% on the assumption of a 15pp increase in the average US tariff rate vs 10pp previously.
- Cash yields are 4.5-6bp lower on the day, with declines led by the front end.
- 2Y yields have stabilized around 3.85% (touched Mar 11 but last sustainably lower in Oct 2024) whilst 10Y yields have stabilized around 4.20% (hit a few times throughout March).
- 2s10s at 35bp (+1bp) remains off last week’s recent high of above 38bps.
- TYM5 trades at 111-18 (+11+) off an earlier high of 111-22+, on strong overnight volumes of 545k. Resistance at the March 20 high (111-17+) has been pierced, with bulls now looking to force a break above the March 11 high (111-25) as they aim to build further on last week's gains. Attention is on key resistance at 112-01 (Mar 4 high).
- Data: MNI Chicago PMI Mar (0945ET), Dallas Fed mfg Mar (1030ET)
- Bill issuance: US Tsy $76B 13W & $68B 26W Bill auctions (1130ET)
