By Vincent-Freědeěric Mivelaz
The European Central Bank says the Eurozone economy is healthy. Lending to non-financial corporations and households increased by 3% in February, a slight decrease from 3.30% in January and slightly higher than December’s 2.90%. February’s annualised growth of adjusted loans for households and non-financial companies were 2.90% and 3.10%. Inflation is down slightly, as M3 money supply decreased to 4.20% from 4.60% in January, suggesting a slowdown in overnight deposits for non-financial corporations. February’s consumer price index remains at 1.10% annualised, signalling a deceleration in retail sales and industrial activity. Economic confidence is falling slightly, in Germany -2.4, Italy -1.8, Spain -1.2, Netherlands -0.5 and France -0.4. Consumer confidence remains stable at 0.1.
EUR/USD’s slight weakness stems from yesterday’s disappointing US March consumer confidence data (127.7 compared to 130.8 in February. As Easter holidays approach, we expect the current level of 1.2385 (+3.11 this year) to decrease to the 1.2377 range.