Forexlive European FX news wrap: Eurozone GDP beats, inflation remains in check (for now)

• US MBA mortgage applications w.e. 25 April -4.2% vs -12.7% prior
• Reminder: Trump will speak at an “Investing in America” event at 16:00 ET/20:00 GMT
• Italy April preliminary CPI (HICP) +2.1% vs +2.3% y/y expected
• Eurozone Q1 preliminary GDP +0.4% vs +0.2% q/q expected
• China’s Xi: China needs to adapt to changing situations
• Switzerland UBS April investor sentiment -51.6 vs -10.7 prior
• Italy Q1 preliminary GDP +0.3% vs +0.2% q/q expected
• Germany Q1 preliminary GDP +0.2% vs +0.2% q/q expected
• Bavaria April CPI +2.1% vs +2.3% y/y prior
• Germany April unemployment change 4k vs 15k expected
• Bessent told French Fin Minister the idea of zero reciprocal tariffs wasn’t unrealistic
• Switzerland April KOF leading indicator index 97.1 vs 101.5 expected
• France April preliminary CPI (HICP) +0.8% vs +0.7% y/y expected
• What are the main events for today?
• Heads up: Chinese markets closure until next week
• Germany March import price index -1.0% vs -0.8% m/m expected
• Germany March retail sales -0.2% vs -0.4% m/m expected
• UK April Nationwide house prices -0.6% vs 0.0% m/m expected
• France Q1 preliminary GDP +0.1% vs +0.1% q/q expected
• FX option expiries for 30 April 10am New York cut

We had lots of data releases this morning but as it’s been the case since April 2, the market mostly ignored the data given the focus on trade negotiations.

The Eurozone preliminary Q1 GDP beat expectations but economists already foresaw an improvement due to tariff-driven frontloading
after companies and consumers in the US stockpiled European goods before
the tariffs started.

Inflation data out of France, Italy and Germany continues to be in check despite ticking a bit higher. The data is not going to change the ECB plan of cutting rates again in June though barring a resolution on the tariffs front.

We got one notable headline early in the morning where French Finance Minister Lombard said that he discussed the idea of reciprocal
zero tariffs with US Treasury Secretary Scott Bessent, and Bessent told him that it was not
unrealistic.

The Swiss sentiment surveys fell by much more than expected, which is not a surprise given the tariffs uncertainty. All around the world we are seeing the same trend in soft data.

In the American session, we will get the Advance US Q1 GDP report where the range of expectations is very wide. The good news is that the markets won’t care given that the GDP report is always old news. The markets look forward and that’s why the focus is on trade negotiations.

We will also get the Canadian GDP, the US ADP, the US Employment Cost Index and the US PCE Price Index. Yep, you guessed it, it’s old news. The main event is Trump’s speech at the “Investing in America” event due at 16:00 ET/20:00 GMT. Nonetheless, watch out for trade related headlines as we continue to wait for the details of the first deal.

This article was written by Giuseppe Dellamotta at www.forexlive.com.