April 30, 2025

“There is a huge amount of data coming out today. GDP growth is the main focus for both the US and the eurozone, and markets also get US core PCE inflation and some CPI figures from France and Germany. US growth is expected to have been negative in Q1, but the key will be the state of the consumption and investment rather than trade distortions.”

Tim Hallinan – Trading Director

USD

The dollar index is heading for its worst month since at least 2022. It rose alongside equities yesterday, however, thanks to Trump easing tariffs on car parts and Commerce Secretary Lutnick building up hope around a first trade deal closed to being signed. The five-year low in consumer confidence was worse than expected, but at this point the freefall in the sentiment indexes has lost its impact.

Today is all about Q1 GDP growth, and it is an interesting one because the consensus estimate has slipped over the last few days to a negative -0.2% print (Q4 was +2.4% annualised). There is likely to be a heavy skew from US companies that have frontloaded their imports to avoid the tariffs (imports are a negative in the GDP calculation). And potentially the dollar might get away with a miserable looking figure as long as the less noisy details – consumer spending and private investment – hold up. Similar to the equivalent for underlying inflation, a ‘core’ version of GDP is probably what investors will be piecing together this afternoon. We also get quarterly Employment Cost Index data, which is a closely watched measure of wage inflation, and the core PCE report for March.

GBP

Sterling will be following the flood of data in the US and the eurozone today, and it has stepped away slightly from its three-year high as the dollar strengthened yesterday. The BoE’s Lombardelli will speak this afternoon, and we get some mortgage lending data tomorrow morning.

EUR

The euro faces a lot of domestic data today, but there is a feeling that FX is all about the US right now. Q1 GDP growth is expected at 0.2% this morning and so far the French figure has matched the 0.1% expectation. French CPI inflation was a touch higher than expected at 0.8% and we get figures from the German regions throughout the morning, ahead of the eurozone print on Friday. It is unlikely that any of these can shift the dial meaningfully for the euro, though, given that the market is less worried about the past and more about the intense uncertainty about the future. To make those predictions about Q2 and beyond, eyes are going to be on the US.

Markets

Wall Street stocks ticked higher yesterday as investors digested the progress made on trade negotiations and in exemptions to car part tariffs. European equities are in the green this morning, too, though US futures are slightly lower.

Main Economic Events (All Times CET)

3:30am: Australian CPI
8:45am: French CPI
11:00am: Eurozone Q1 GDP
2:00pm: German CPI
2:30pm: US Q1 GDP & Employment Cost Index
2:30pm: Canadian Q1 GDP
4:00pm: US Core PCE Inflation

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