Please ensure Javascript is enabled for purposes of website accessibility

Eurozone Q1 GDP revised higher

Khatija Haque - Head of Research & Chief Economist
Published Date: 09 June 2022


  • The Reserve Bank of India (RBI) has hiked its benchmark repo rate by 50bps, taking it to 4.90%. This was more aggressive than the consensus prediction of 40bps hikes, which would have matched the hike seen in May when the central bank surprised with an intermeeting move. We now forecast a further 75bps of hikes through the end of the year, taking the end-2022 rate to 5.65%.
  • German industrial production rose by a smaller than forecast 0.7% m/m in April, although the March figure was revised slightly higher. Output may have recovered further in May, but activity remains constrained by high energy prices, supply shortages and the war in Ukraine.
  • Eurozone GDP for Q1 was revised higher in the final estimate to 0.6% q/q and 5.4% y/y from 5.1% previously.  However, this was largely due to higher inventories and the inclusion of volatile Irish GDP data.  Worryingly, household consumption declined in Q1, reflecting weak domestic demand.  
  • The focus today will be on the ECB meeting in Amsterdam, where the central bank is expected to signal the start of the hiking cycle in July after ending asset purchases in June.  Inflation forecasts are likely to be revised higher, while GDP growth may be revised lower. 
  • In Dubai, the number of international visitors rose to 5.1mn in the first four months of the year, up more than 200% on 2021. The number of visitors has recovered to 81% of 2019 levels. 
  • Iraqi lawmakers have passed an emergengy food bill that will allow the allocation of USD 17.1bn for spending on vital imports of wheat and rice, and for paying salaries and energy costs. 

Key economic data and events today

  • 15:45 ECB rate decision, forecast no change
  • 16:30 US initial jobless claims (4 June) forecast 206k
  • Egypt May CPI data due for release, no forecast

Fixed Income

  • US Treasuries fell overnight even as there were few fundamental catalysts to push markets one way or another. Yields on the 2yr UST added almost 5bps to settle at 2.7739% while the 10yr pushed up by around the same amount to close back above the 3% level. Bond markets in Europe showed similar moves with bund yields adding 6bps to 1.349% and the 10yr gilt yield up 3bps to 2.244%.
  • Jordan priced a USD 650m 5yr bond at 7.95%, slightly tighter than initial guidance. Jordan is rated ‘B+’ by S&P.


  • A general move away from risk assets and pull higher in US yields helped to push the dollar overnight. The DXY index added 0.2% to close at 102.542 with the gains largely coming from GBPUSD which fell 0.44% to 1.2537 and USDJPY which jumped more than 1.2% to 134.25. EURUSD managed to gain, up by 0.12% to 1.0716 ahead of today’s ECB meeting.
  • Commodity currencies were weaker across the board with USDCAD adding 0.22% to 1.256 while AUDUSD fell 0.5% to 0.7194 and NZDUSD dropped by 0.65% to 0.6448.


  • The day started positively as Asian markets followed the US’s gains of the previous day, with the Hang Seng adding 0.2%, the Shanghai Composite 0.7% and the Nikkei 1.0%. However, European markets were not so buoyant and while the FTSE 100 dropped only -0.1%, the DAX and the CAC both closed -0.8% lower.
  • The risk-off sentiment continued in the US, with all three major benchmark indices closing down. The NASDAQ, the Dow Jones and the S&P 500 lost -0.7%, -0.8% and -1.1% respectively.
  • Locally, the DFM gained 0.7% but the ADX lost -0.3% and the Tadawul -0.5%. Egypt’s EGX 30 gained 1.9%, while Turkey’s Borsa Istanbul 100 closed -4.1% lower.


  • Oil prices added another leg higher overnight as data show an increasingly tightening market. Brent futures added 2.5% to close at 123.58/b while WTI gained 2.3% to settle at USD 122.11/b. Data from the EIA showed a 2m bbl increase in commercial crude stocks though that was offset by a more than 7m bbl drop in SPR inventories. Gasoline stocks also fell last week. Oil production was flat again at 11.9m b/d while product supplied rose by 715k b/d to 20.2m b/d.
  • Suhail al Mazrouei, the UAE’s energy minister, said oil prices could run higher still as demand hasn’t normalized in China following the country’s strict Covid measures.

Click here to download charts and tables