Very weak GDP data out of France and Germany this morning doesn’t bode well for the eurozone figure out at 10:00 GMT.
Here’s how markets are responding in early trading, from Jamie Chisholm’s Global Markets Overview.
European stocks are lower after data showed no growth in the continent’s two biggest economies and as worries over Ukraine linger. But losses are mild with investors hoping the recent raft of poor economic reports means monetary policy will stay loose for longer.
The FTSE Eurofirst 300 is easing 0.2 per cent, its Asia-Pacific peer gained 0.3 per cent, and US index futures suggest the S&P 500 will be barely changed at 1,947.
Moscow’s Micex index is down 0.2 per cent and the rouble is 0.1 per cent softer as Russia’s aid convoy approaches the Ukraine border, creating a possible flashpoint with Kiev.
Despite the cautious tone to the start of European trading, global equity investors in recent sessions appear to have adopted the “bad news is good news” mantra.
Under this bullish scenario, sour economic reports are seen as beneficial for stocks because they convince central banks to maintain stimulus measures and keep interest rates at ultra-low levels for an extended period.
“The underlying theme in asset markets is crystal clear today,” wrote analysts at CitFx in a note to clients with the heading “Cheap money for evermore”.
Thursday has brought more disappointing data. The German economy contracted by 0.2 per cent in the second quarter while France stagnated.
The euro is down 6 pips to $1.3358, just 30 pips or so above 9-month lows, as Berlin’s 2-year implied borrowing costs sit at minus 1 basis point.
The 10-year German Bund yield is down 1bp to a record low of 1.02 per cent, reflecting expectations that the European Central Bank will have to adopt further stimulus measures to boost growth.
