-Euro area data below expectations
Last week, data on inflation, growth, and unemployment were closely watched.
Annual inflation slowed down for the second consecutive month, while month-on-month growth also decreased.
Unemployment remained unchanged but was still held at low levels. As a result, last week’s economic data came in below expectations.
Seasonally adjusted GDP rose by 0.6 percent in both the euro area and in the European Union (EU) during the fourth quarter of 2017, compared with the previous quarter, according to a preliminary flash estimate published by Eurostat, the statistical office of the European Union.
This was slightly lower than the previous quarter. In the third quarter of 2017, GDP had grown by 0.7 percent in both zones.
Compared with the fourth quarter of 2016, seasonally-adjusted GDP rose by 2.7 percent in the euro area and by 2.6 percent in the EU in the fourth quarter of 2017, after 2.8 percent growth in both zones in the third quarter.
Over the entire year of 2017, GDP grew by 2.5 percent in both zones, which experts say is the strongest growth rate in the last 10 years.
Euro area annual inflation is expected to be 1.3 percent in January 2018, down from 1.4 percent in December 2017, according to a flash estimate from Eurostat.
The annual inflation in the currency union continues to fall short of the European Central Bank’s target of nearly 2 percent. Persistent weak inflation is one of the main factors preventing the ECB from normalizing its monetary policy.
The euro area seasonally adjusted unemployment rate was 8.7 percent in December 2017, stable compared to November 2017. This remains the lowest recorded rate in the euro area since January 2009.
The EU unemployment rate was 7.3 percent in December 2017, stable compared to November 2017 and the lowest rate recorded in the EU since October 2008.
-The week ahead
Markets will focus on speeches from European Central Bank officials and will closely watch coalition talks in Germany