Data from Eurozone are generally positive today. German CPI accelerated to 0.5% mom, 2.2% yoy in May, up from 0.0% mom, 1.6% yoy, and beat expectation of 0.3% mom, 1.9% yoy. Retail sales rose much more than expected by 2.3% mom in April versus consensus of 0.5% mom. Import price index rose 0.6%, below expectation of 0.7% mom.
German unemployment dropped -11k in May. Unemployment rate dropped to 5.2%, hitting the lowest level on record since reunification in 1990. Labour Office head Detlef Scheele said in a statement that “unemployment and underemployment have decreased again, employment within the scope of the social security system keeps rising and labour demand is still high.” And, “the upward trend on the labour market is continuing, albeit at a slower pace than in the winter months.”
Eurozone business climate rose to 1.45 in May, up from 1.39 and beat expectation of 1.30. Economic confidence dropped to 112.5, down from 112.7 but beat expectation of 112.0. Industrial confidence dropped to 16.8, down from 7.3 but met expectation. Services confidence dropped to 14.3, down from 14.7 but met expectation. Consumer confidence was finalized at 0.2.
French GDP was the main disappointment as it’s revised down to 0.2% qoq in Q1, down from 0.3% qoq. But that’s considered the “past” already.
For Q2, the set German data are rather robust and should ease much concerns of ECB policy makers, in particular the CPI figure.
