Following a rapid series of gains in the Euro in response to investor speculation of an earlier end to stimulus, the European Central Bank suggested that the latest Governing Council remarks were misinterpreted. According to sources, the ECB intends to maintain its easing measures while indicating that no tightening will occur until asset purchases have concluded. With preliminary Euro Area inflation data suggesting a pullback in price growth during March, any policy changes are unlikely before the second half of the year. Apart from mainland Europe, the UK took the next step towards leaving the European Union after Prime Minister Theresa May officially triggered Article 50 of Brexit, paving the way for negotiations to begin. Shifting eastwards, Japanese unemployment managed to reach a 22-year low, however, annualized household spending remains weak, keeping a lid on inflation. The headline national figure slipped to 0.30% growth in February while core inflation edged modestly higher to 0.20%.
To cap off the week, US GDP growth for the fourth quarter was revised higher to 2.10%. Aggregate 2016 growth came in at 1.60%, marking the slowest expansion since 2011, denting optimism despite the pickup in PCE inflation which will help the Federal Reserve’s case for raising interest rates.