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Eurozone Q1 preliminary GDP +0.1% vs +0.2% q/q expected

Prior +0.2%GDP Y/Y +0.8% vs +0.9% expectedPrior +1.2%These lower than expected figures further complicate ECB’s decision but points more towards a neutral stance with a slightly hawkish bias in case the war drags on for several more months. Bear in mind that GDP is expected to contract further in Q2 if the war extends into summer.The Core CPI released at the same time eased further to 2.2% vs 2.3% prior. The economic data leading up to today’s ECB decision supports more a patient approach rather than an outright hawkish leaning as expected by the market.
This article was written by Giuseppe Dellamotta at investinglive.com.

đź”— Source

đź’ˇ DMK Insight

The latest GDP figures are a wake-up call for traders: lower growth signals potential volatility ahead. With GDP growth at +0.2% year-over-year, down from +1.2%, and below the +0.9% expectation, the European Central Bank (ECB) faces a tricky balancing act. This data complicates their policy decisions, suggesting a neutral stance might be the safest route, especially if geopolitical tensions persist. Traders should keep an eye on how this impacts the euro against major currencies. If the ECB leans hawkish despite the weak data, we could see a short-term spike in euro volatility. However, if they signal a dovish approach, expect downward pressure on the euro, particularly against the dollar. Watch for the upcoming Q2 GDP estimates—if they confirm contraction, it could trigger a bearish sentiment shift across European assets. Key levels to monitor are the euro’s support around 1.05 and resistance near 1.10. Institutional traders are likely to react swiftly to any ECB comments, so stay alert for shifts in sentiment that could affect your positions.

đź“® Takeaway

Keep an eye on euro levels around 1.05 and 1.10 as ECB signals could drive volatility in the coming weeks.

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