Eurozone Avoids Technical Recession In Q4 2023

The Federal Reserve decision will likely be the major financial event this week but market analysts will also have the chance to scrutinise data related to Australia’s CPI inflation and the eurozone countries’ GDP growth.

A report by Eurostat showed that the eurozone avoided a technical recession  in the fourth quarter of the year, recording zero growth. While France and Germany underperformed, the euro bloc’s economy got a boost from Spain, Portugal and Italy.

This week marks the busiest slate of the earnings season, with 19% of the S&P 500 reporting earnings. Microsoft, Apple, Meta, Amazon and Alphabet are just some of the companies that will be posting their results.

Eurozone GDP Q4 2023 Reports

Preliminary GDP data reports for the fourth quarter of the previous year showed that the French economy stagnated (0% growth) while it grew by only 0.9% in 2023. A data set from Spain showed that the country’s economy grew by 0.6% in Q4 2023 surpassing expectations.

According to a report by the WIFO statistics office, Austria seems to have evaded recession as its economy expanded by 0.2%, in contrast with analysts’ expectations for a 0.2% contraction in the last quarter of 2023. Austria’s neighbouring German economy shrank by 0.3% during the October-December quarter with ING analysts’ suggesting that Germany is in a “shallow recession.”

Australia CPI Q4 2023 Report

The Australian Bureau of Statistics (ABS) will publish its December and Q4 2023 CPI report on Tuesday. Economists forecast CPI inflation to have dropped in December to 3.7% on an annualised basis from 4.3% recorded in November.

Headline inflation in the last quarter of 2023 is likely to come in at 4.3% on a year-to-year basis down from 5.4% recorded in the third quarter. It should be noted that the Reserve Bank of Australia (RBA) monetary policy meeting is due next week, and inflation figures are expected to play a role in a potential policy adjustment.

ECB's Kažimír: Rate Cut In June, Not Earlier

Peter Kažimír, the ECB’s board member and the governor of the National Bank of Slovakia, told reporters that  the next move of the council would likely be an interest rate cut as it seemed to be “within reach.” Kažimír suggested that a rate cut in June would be more probable than in April but stressed that the impact is much more significant than the actual timing.

The Slovak member of the ECB’s council said that markets are ahead of the curve when it comes to rate cuts, adding that the bank should be patient before making such pivotal decisions.

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