France was the first to report, posting GDP growth of 0.5 per cent between July and September and inflation of 1.2 per cent in the year to October, both of which were slightly ahead of traders’ predictions.
Data was more mixed for the whole Eurozone, however, with GDP up 0.6 per cent between June and September – slightly up on market expectations – while inflation undershot predictions at 1.4 per cent for the year to October.
This will be a concern for the European Central Bank, which last week cut its money printing programme in half in anticipation of continued strong economic data, with weak inflation flagged as a potential stumbling block that might lead to a reverse of the bank’s decision.
Italy, however, disappointed traders – posting below expectation inflation of -0.2 per cent for October, pushing full year predictions to just 1 per cent.
This puts the breakers on a strong period for Europe’s third largest economy, which has enjoyed a slew of positive news in recent weeks, including a hike in its sovereign rating to ‘BBB’ by ratings agency S&P on Friday.
Italy’s benchmark 10-year bond yield fell to 1.837 per cent on Tuesday morning, its lowest level Since January. This is down 0.33 per cent on the the month, marking the biggest 30-day drop since July 2015, according to Reuters and Tradeweb.
Sterling was up slightly against the US dollar at £1.3204 as traders hold steady in anticipation of big news out of the US this week, including the Federal Reserve’s interest rate decision on Wednesday and national employment figures on Friday.
However, the dollar did slip to an 11-day low against the Japanese yen, as FBI investigators probing Russia’s involvement in the recent US election charged President Donald Trump’s former campaign manager Paul Manafort with money laundering – turning investors cautious.