Rolling coverage as the latest GDP figures show the state of the eurozone, and the ongoing Greece bailout crisis continuesHopes grow for Greek dealGerman economy boosted by domestic demandBut France grows by just 0.1%Netherlands GDP up 0.5%Introduction: Eurozone gets its report card 8.49am GMT Germany’s stock market has hit a new all-time high:Dax reaches 11.000! 8.48am GMT Germany should also benefit if the Ukraine ceasefire holds, says Christian Schulz of Berenberg bank:The tailwinds from cheap oil, a weaker euro exchange rate and increasingly aggressive ECB monetary policy easing should more than offset the serious short-term risks such as Greece and Russia. While the first half of 2015 could still be a little more subdued due to these risks, we expect German growth to reach trend levels a bit above 2% in the summer 2015. 8.47am GMT Back to the GDP data... and Carsten Brzeski of ING reckons Germany is going to enjoy 2015:Looking ahead, the German economy looks set to continue surfing on a wave of economic well-being. With the strong labour market, wage increases, low energy prices and extremely low interest rates, consumers should continue to spend it. At the same time, the weak euro will definitely benefit German exports, letting them return as a growth engine. 8.45am GMT Optimism is growing that Greece and its lenders are going to hammer out a bailout extension in time.Germany won’t insist that all elements of Greece’s current aid program continue, said two officials in Berlin. As long as the program is prolonged, they said, Germany would be open to talking about the size of Greece’s budget-surplus requirement and conditions to sell off government assets.Greek delegation at EUCO sound elated but have conceded program continuity to kill TroikaGreek government climbs down, agrees to talks with Troika as tax receipts collapse and banks get another €5bn in ELA. Reality dawns? 8.26am GMT If you change the perspective a bit French GDP doesn't look too bad. They just don't like sudden movements. pic.twitter.com/gF1oOlFxPJ 8.23am GMT This morning’s GDP data is giving European stock markets a lift.The ceasefire in Ukraine, and hopes of a breakthrough in the Greek bailout talks, have also helped to push the main indices up in early trading. 8.11am GMT France’s finance minister, Michel Sapin, is hopeful that the country’s economy might pick up this year, after ending 2014 with growth of just 0.1%.He told French radio that:“It’s obviously still too weak, but the conditions are ripe to permit a cleaner start of activity in 2015.” 8.01am GMT Outside the eurozone, Hungary has also outperformed expectations; its economy grew by 3.4% year-on-year in the October-December period, compared to the 2.9% expected. 7.58am GMT The eurozone could have grown by as much as 0.4% in the last quarter, reckons Claus Vistesen, macroeconomist for Pantheon Macroeconomics.@graemewearden Yeah, the EZ consensus of 0.2% is way too pessimistic, more like 0.4% unless Italy is a complete stinker. 7.53am GMT Back to the Dutch data briefly, and Statistics Netherlands says the 0.5% growth was broad-based, with exports, household consumption and investments all rising. 7.49am GMT The strong German growth figures are a “thunderbolt”, says economist Andreas Rees at Unicredit. Rees told Reuters:“Economic recovery in Germany started much earlier than expected. Some spoke of possible recession after the summer but instead Germany rebounded. The fact that the growth comes mainly from the domestic economy gives strong grounds for optimism,” “Thanks to 2014’s strong finish we have a higher chance of seeing stronger-than-expected growth this year, which would help the rest of the euro zone.” 7.41am GMT The Netherlands has followed Germany’s lead by reporting faster than expected growth.Dutch GDP grew by 0.5% in the last quarter, according to Statistics Netherlands, beating forecasts of 0.3%.Netherlands Q4 GDP growth of 0.5% qoq. Notwithstanding France's worrying weakness, euro zone on track for welcome 0.3% Q4 aggregate growth. 7.32am GMT The forecast-beating German growth data suggests the eurozone may have grown faster than the 0.2% economists had expected:German growth at 0.7% on the quarter, well ahead of consensus of 0.3%. That should push up Eurozone growth to above the expected 0.2%. 7.18am GMT The story so far:#German growth accelerates on consumer spending as #France slows 7.16am GMT The surge in German exports suggests Europe’s powerhouse economy is benefitting from the weak euro. That’s ironic, given the Bundesbank’s attempts to prevent the European Central Bank launching its quantitative easing stimulus programme, which has helped pushed down the value of the euro.#German #GDP powers ahead of forecasts. Economic growth of 0.7% in the fourth quarter from the third, driven by climb in exports #forexnews 7.12am GMT Destatis, the German statistics body, says that the country’s economy “gained momentum towards the end of 2014,” with its growth of 0.7%.It adds:In a quarter-on-quarter comparison (adjusted for price, seasonal and calendar variations), positive contributions were made mainly by domestic demand. Especially households markedly increased their final consumption expenditure again. A positive development was also observed for fixed capital formation which was up on the third quarter of 2014 in machinery and equipment and especially in construction. 7.10am GMT German exports also drove growth in the last three months of the year:German GDP beat at .07% is basically due to 2 factors: weak euro helped exports and Germans went on a Q4 shopping spree. Very Un-German. 7.09am GMT Germany’s stats office also reports that the economy grew by 1.6% during 2014 -- that’s four times as fast as France. 7.04am GMT Instant reaction:the German economy is showing off. Q4 GDP +0.7 after France announces a more modest 0.1% increase. 7.03am GMT Germany has smashed growth forecasts.Its GDP rose by 0.7% in the fourth quarter of 2014, more than twice the 0.3% economists expected. BIG beat from Germany 6.56am GMT Credit Agricole’s Frederik Ducrozet agrees:(Lack of) investment is Eurozone's main problem, not only the periphery's.“The expectation is that now France will finally be pulled out of its stagnation trap by its neighbours. “The external conditions cannot be more favorable and on top of that you have a domestic improvement driven by credit easing at the ECB.” 6.55am GMT Sophie Pedder, Paris Bureau Chief at The Economist, is also concerned by that French investment keeps falling:French GDP grew in Q4 21014 by 0.1% (0.4% for year). But investment was still DOWN (-0.5% in Q4). Worrying. 6.50am GMT Today’s GDP data shows that French firms remain unwilling to invest.Gross fixed capital formation shrank by 0.5% in October-December, following a 0.6% drop in the third quarter.CHART:French GDP +0.1% in 4Q but investment continued to decline! No real recovery before the downward trend reverses pic.twitter.com/OiCrrqMBYKExports accelerated markedly in Q4 (+2.3% after +0.7%), while imports kept on increasing (+1.7% after +1.3%). 6.39am GMT 4th quarter French GDP +0.1% - whoopee! annualised forecast 0.4% ( better than expected) but pretty average stuff! 6.39am GMT Here we go: The French economy grew by just 0.1% in the last three months of 2014.INSEE, the French statistics body, also reports that GDP rose by just 0.4% during 2014. French GDP rose by 0.4% in 2014. Used to be forecast at 1.5%, then 1.0%, 0.5%... 6.27am GMT Good morning.Is the eurozone’s economy continuing to struggle, or is it starting to pick up after some tough times?“Europe always aims to find a compromise, and that is the success of Europe. Germany is ready for that.However, it must also be said that Europe’s credibility naturally depends on us respecting rules and being reliable with each other.”PM Tsipras and PEG Dijsselbloem agreed today to ask the institutions to engage with the Greek authorities to start work on a technical (1/2)assessment of the common ground between the current program and the Greek government's plans in order to facilitate 16/2 EG discussions(2/2) Continue reading...
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