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Economic growth in Euroland hurt by Russia - BTMU

FXStreet (Barcelona) -Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, underlines the problems for the euro zone economy stemming from the geopolitical situation in Russia-Ukraine.

Key Quotes

"National inflation data yesterday revealed an unchanged annual CPI rate of 0.8% and hence there’s a chance that the euro-zone flash estimate today also comes in unchanged at 0.4%. Some of the other country data declined however (Spain and Italy expected to today) and hence we might still get a modest decline to 0.3%."

"To be honest though, the grim macro story and the comments from Draghi make this less important. With more sanctions also now on the way for Russia, the economic hit to the euro-zone is only going to get worse."

"The latest evidence of that was the German retail sales report this morning. In contrast to the expected unchanged estimate, retail sales plunged 1.4% and clearly consumers as well as businesses in Germany are hurting."

"GfK Consumer Confidence data on Wednesday from Germany revealed the largest drop in economic expectations since the 1980s. So the gravity of situation has gone a bit beyond whether we get a 0.3% or 0.4% print in the flash CPI estimate today."

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