30.04.25 - Eurozone stronger than expected growth

The Eurozone economy grew by a stronger-than-expected 0.4% in the first quarter 2025. Economists polled had forecast a 0.2% expansion. Figures published earlier this morning the GDP of Europe’s largest economy, Germany, grew 0.2% over the same period while French GDP added 0.1%. Southern European and smaller economies outperformed.

Alongside the stronger-than-expected economic growth data, Q1 corporate earnings have been largely solid, with several companies even delivering upside surprises. However, forward guidance often reflects elevated uncertainty amid rising macroeconomic and geopolitical risks.

Markets: Equity indices in Europe see another positive day, gold with some profit taking and prices falling below USD 3’300, oil fell below USD 60 (WTI), US dollar and cryptos trading sideways while interest rates are lower.

My view: It is possible that Q1 was supported by front-loaded orders executed ahead of looming tariff hikes. While these backward-looking figures paint a seemingly strong picture, the outlook appears far less reassuring. Leading indicators increasingly signal a potential contraction, and corporate guidance is often marked by caution and uncertainty.

Equity markets continue to surprise me. I do not share the current risk-on sentiment.

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