As expected, the euro-zone economies contracted also in the third quarter of 2012, making it two consecutive quarters of contraction – a recession.
The euro-zone contracted by 0.1%, better than -0.2% that was expected, after Germany, France and Italy all slightly exceeded expectations.
The euro-zone also reported inflation figures: CPI is at 2.5% and core CPI at 1.5% (year-over-year), exactly as expected.
EUR/USD is now ticking lower to 1.2758. See technical lines in the euro to usd forecast.
The euro-zone economy is 0.6% smaller than at the same quarter last year. It shrank by 0.2% in Q2. It’s important to note that while Italy’s GDP came out better than expected, it still saw a drop of 0.2%, and completed five consecutive quarters of falls.
Germany is still growing and France resumed its growth after remaining flat, but the forward looking PMIs aren’t positive.
In addition, the Greek issues certainly loom. Further reading: A Grexit or a haircut – Germany’s choice
