The euro is rising before tomorrow’s ECB decision, yen sales continue

In Europe, the FTSE has fallen by 0.60% at the time of writing. The DAX has decreased by -0.73%. CAC decrease -1.00%. German 10-year bond yields rose by 0.061 to 1.357. Previously in Asia, the Nikkei rose 1.04%. Hong Kong’s HSI is up 2.24%. The Shanghai SSE China Index rose 0.68%. The Singapore Street Times index fell 0.18%. Yields on 10-year Japanese government bonds fell from -0.0019 to 0.248.

Eurozone GDP reached 0.6% qoq in the first quarter, EU 0.7% qoq

Euro area GDP grew by 0.6% qoq in the first quarter, following an upward estimate of 0.3% qoq. EU GDP grew by 0.7% qoq. The highest quarter-on-quarter GDP growth was recorded in Ireland (+ 10.8%), followed by Romania (+ 5.2%) and Latvia (+ 3.6%). The decrease was in Sweden (-0.8%), France (-0.2%) and Denmark (-0.1%).

Employment in the euro area grew by 0.6% in a row, while employment in the European Union grew by 0.5% qoq. The highest quarter-on-quarter employment growth in the first quarter of 2022 was recorded in Estonia (+ 3.5%), Latvia (+ 2.1%) and Portugal (+ 1.7%). Employment decreased in Poland (-0.6%) and Croatia (-0.1%).

Also omitted, German industrial production rose 0.7% year-on-year in April, down from a 1.0% year-on-year. France’s trade deficit in April was -12.2 billion euros, compared to the forecast -11.1 billion euros. Italian retail sales remained stable at below 0.3%. Switzerland’s unemployment rate remained unchanged at 2.2% in May.

UK construction PMI falls to 56.4, optimism worsens

The UK construction PMI fell from 58.2 to 56.4 in May, which is lower than expected at 56.9. Standard & Poor’s Global said overall activity grew at a slower pace since January. Housing was still the worst performer. Optimism was at its lowest level since August 2020.

Tim Moore, Chief Economic Officer, S&P Global Market Intelligence: “The May data showed strong overall growth in construction output in the UK, as resilience in the commercial and civil engineering sectors helped offset weak housing construction. Residential construction approaching recession… Expanded New orders at a slower pace since the end of 2021…

He mentioned concerns about the business outlook, lowering expectations for the construction sector to its lowest level in more than a year and a half in May. About 19% of builders expect a direct decline in business activity over the next year, compared to only 5% in early 2022.

BoJ Kuroda: Several models show that a weak yen is positive

Haruhiko Kuroda, Governor of the Bank of Japan, said the yen’s downturn was “positive for the economy as long as the pace was stable.” He added: “Various macroeconomic models show that the yen’s weakness is positive,” but also stressed the importance of the exchange rate moving “to reflect fundamentals.”

Kuroda also withdrew the remaining amount previously paid due to inflation, which provoked a backlash on social media. “I don’t think consumers will willingly accept price increases,” he told reporters in the prime minister’s office. “I’m sorry if my words were misunderstood.”

Japan’s GDP in the first quarter ended with -0.1% qoq, -0.5% year on year

Japan’s GDP reached -0.1% qoq in the first quarter, which is better than the previous estimate of -0.3% qoq. in the semester. GDP contracted by -0.5%.

Private consumption, which accounts for more than half of GDP, was revised upwards by 0.06% from -0.03% on a quarterly basis. Capital expenditure decreased by -0.7% from -0.5%. The increase in exports remained unchanged at 1.1%, while imports increased by 3.3% and decreased from 3.4%.

The GDP deflator was closed at -0.5% g / y and the model was revised to -0.4% g / y.

Lunch forecast EUR / JPY

Milestones of the day: (S1) 141.31; (p) 141.69; (R1) 142.38; more….

EUR / JPY rose to its highest level today, reaching 144.20. Continuing the breakthrough of 144.06 could lead to further bullish acceleration in the medium term. The next target in the near future is 100% from 124.37 to 139.99 from 132.63 at 148.25. On the downside, small support below 141.36 will turn into a neutral daily deviation and provide consolidation first.

The largest picture shows a steady upward trend from 114.42 (the lowest in 2020). This increase is considered to be the third step in the model from 109.30 (the lowest figure in 2016). The next goal would be a 100% drop from 114.42 to 134.11 from 124.37 at 144.06. A strong break would indicate an upward acceleration and target long-term resistance of 149.76 (2014 high). In any case, expectations will now remain strong as long as 132.63 support remains in the event of a deep resignation.

Updating economic indicators

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