RPT—❗️🇪🇺Cable FX Macro Weekly Note: EU Q4 GDP Growth

**As seen in Risk In The Week report 01/26/24, subscribe at cablefxm.co.uk/reports 

The European economy contracted by 0.1% for the second consecutive quarter in Q3, this was in line with economists' expectations. Both France and Germany declined during the quarter at 0.1%, the latter was later revised up to flat and shrank by 0.3% in Q4 which helped avoid a technical recession. For 2023, the German economy contracted by 0.3%, this was in line with the consensus. While the eurozone output is seen declining over Q4, economists pencil in a net 0.5% expansion for last year. The outlook seems more challenging as activity slows, prior monetary tightening filters into the economy, and inflation remains above the central bank's target.

The most recent survey of ECB forecasters downgraded growth across the horizon, output is now estimated at only 0.6% in 2024. Analysts at Danske Bank noted the ECB's reluctance to signal a rate cut before the summer, President Lagarde did not fully acknowledge soft data in recent activity surveys. Danske penciled the first ECB rate cut to come by June and added that incoming data will help provide clarity in the coming weeks.