Euro zone growth holds steady at an annualised 1.7 per cent in the first quarter, according to new data, in a further sign that ECB stimulus is feeding through into a recovery. But, as David Pollard reports, the still weak performance of some member states may dampen its enthusiasm for easing back on its 2.3 trillion euro QE programme.
The media call them Merkron. The new French president and veteran German leader appearing together on Monday - the picture of a stable bond at the heart of the euro zone. Where the economy - apparently - consolidates .... In Q1 maintaining a steady annual 1.7 per cent growth rate. Its March trade surplus double that of February. (SOUNDBITE) (English) NICK PARSONS, GLOBAL HEAD FX STRATEGY, NAB, SAYING: "It's strong relative to where it's been ... It's also strong relative to expectations, and it's also strong where it needs to be because it needs to be strong in the core." But some - if not all - outside the core need to be stronger. Portugal at a 10-year peak rate of 2.8 per cent year on year - but Greece still shrinking. And for the euro zone's number three economy, Italy: just a 0.2 per cent quarterly rise. (SOUNDBITE) (English) NICK PARSONS, GLOBAL HEAD FX STRATEGY, NAB, SAYING: "We have got weak household consumption. Private sector job creation in Italy has been disappointing for many many years. And there are no signs yet of that turning round." Italy could, says Parsons, be the markets' next big worry. Meaning few worries - for now - of the ECB easing back on its massive monetary stimulus programme. (SOUNDBITE) (English) NICK PARSONS, GLOBAL HEAD FX STRATEGY, NAB, SAYING: "It's a little bit too early for the ECB to be withdrawing stimulus ... We think they'll be signalling that in the fourth quarter effective in Q1 of next year." Emmanuel Macron and Angela Merkel, meanwhile, agreed to draw up a new 'road map' for European integration. Though Germany is resistant to his ideas for a euro zone budget and finance minister ... And back home, trade unions are seen as more than ready to push back against Macron on labour reform. The honeymoon period for France's untested new leader may soon be over.