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Germany’s annual GDP came in at +0.2%, matching the +0.2% expectation and marking a modest return to positive growth. While the pace is still subdued, the print supports a “stabilization, not rebound” narrative—consistent with an economy grinding forward amid weak industrial momentum and still-cautious demand.

Market impact: Generally EUR-neutral to mildly supportive, as the number reduces recession chatter but is not strong enough to materially shift ECB expectations. Bunds may see limited reaction unless follow-through data (PMIs, orders, labor) confirm a broader upswing.

Spain’s December inflation data were in line and broadly stable, keeping headline inflation elevated relative to core Eurozone peers. CPI held at 2.9% y/y (in line, vs 3.0% prior) and HICP eased to 3.0% y/y (in line, vs 3.2% prior). Monthly prints were firm but expected: CPI rose 0.3% m/m (in line, vs 0.2% prior) and HICP increased 0.3% m/m (in line, vs 0.0% prior). Core CPI stayed at 2.6% y/y (unchanged), suggesting underlying inflation is not re-accelerating, but remains sticky enough to keep the ECB attentive to services and wage dynamics.

Market impact: Generally, EUR-neutral, with Spain’s steady core reinforcing the “disinflation, but uneven” narrative across the bloc. Bonds can take mild support from the easing in HICP, but the bigger ECB driver remains aggregate Eurozone core/services inflation and wages.

France’s December inflation prints were benign and broadly in line, reinforcing the Eurozone disinflation backdrop. CPI rose 0.1% m/m (in line, vs -0.2% prior) and HICP also increased 0.1% m/m (in line, vs -0.2% prior). On a yearly basis, CPI held at 0.8% y/y (in line, vs 0.9% prior), while HICP eased to 0.7% y/y (in line, vs 0.8% prior). Inflation excluding tobacco slowed to 0.7% y/y (from 0.9%), underscoring continued cooling in underlying price dynamics.

Market impact: Mildly EUR-negative / bond-supportive at the margin, as softer inflation readings strengthen the case for easier ECB policy over time. The reaction is usually modest on a standalone basis, but this reinforces the broader narrative of subdued inflation in core Europe.

Germany’s wholesale price inflation (WPI) softened in December. WPI fell -0.2% m/m (vs +0.2% expected, +0.3% prior), while WPI eased to 1.2% y/y (from 1.5%). The negative monthly print suggests reduced upstream price pressure at year-end, consistent with a broader cooling in goods-price momentum and less near-term pipeline inflation feeding into consumer prices.

Market impact: Mildly EUR-negative / bond-supportive at the margin, as softer pipeline inflation can reinforce disinflation expectations. Standalone impact is typically limited, but it adds to the evidence base the ECB watches alongside wage growth and services inflation.

Germany’s 30-year Bund auction cleared at 3.450%, up sharply from 3.260% previously, pointing to a meaningful repricing higher in long-end euro rates. A move of this magnitude typically reflects higher term premium—investors demanding more compensation for duration risk—amid heavier supply expectations, sticky long-run inflation uncertainty, and global yield spillovers.

Market impact: Modestly bearish for long-duration EUR rates (higher long-end yields) and can be mildly EUR-supportive via wider rate differentials. For equities, higher long-end yields can be a headwind for rate-sensitive sectors, while benefiting banks through steeper curve dynamics.

France’s latest short-term BTF auctions kept yields broadly anchored around 2%, signaling stable front-end funding conditions. The 12-month BTF printed 2.098% (vs 2.116% prior), and the 3-month BTF came in at 2.026% (vs 2.043% prior), both slightly lower than the previous auctions. The 6-month BTF edged up to 2.068% (vs 2.060% prior), suggesting only minor repricing rather than any meaningful shift in rate expectations.

Market impact: Limited standalone impact, but steady French front-end yields are mildly supportive for EUR rates stability and help keep OAT-Bund spread concerns contained at the margin. Bigger drivers remain ECB policy signals and broader risk sentiment.

Germany’s current account surplus rose to €15.1B in November (vs €14.8B prior), signaling a slightly stronger external balance. A wider surplus typically reflects a net positive from trade in goods/services and investment income, reinforcing Germany’s role as a stabilizing external anchor for the euro area—even if month-to-month moves can be influenced by energy import costs, export volumes, and seasonal factors.

Market impact: Usually limited immediate impact on EUR, but a firmer current account surplus is structurally supportive over time by underpinning external funding strength. Near-term EUR direction still depends more on ECB expectations and global risk sentiment.

Germany’s latest Bubill auctions kept short-dated yields around the 2% handle: the 12-month Bubill printed 2.004% (vs 2.029% prior), while the 6-month Bubill came in at 1.986% (vs -0.623% prior). The 12-month result shows only a slight easing versus the previous auction, but the 6-month comparison signals a major repricing versus the earlier negative-yield regime—consistent with the post-tightening environment where front-end rates remain anchored by policy and money-market conditions.

Market impact: Mildly EUR-supportive at the margin via firmer short-end rate differentials, but the bigger drivers remain ECB guidance and broader risk tone. Bund front-end stability also helps cap volatility in European funding markets.

Eurozone Sentix Investor Confidence improved sharply in January to -1.8 (-5.1 expected, -6.2 prior), signaling a notable upgrade in investor mood versus late 2025. Although the index remains slightly negative—implying confidence is not yet fully back in expansionary territory—the magnitude of the surprise suggests risk appetite toward the region is stabilizing, likely helped by easing recession fears and better-than-feared activity signals.

Market impact: Mildly EUR-supportive on the surprise (risk sentiment tailwind), but follow-through depends on hard data and ECB guidance. If confirmed by PMIs/credit data, it can support European equities and narrow peripheral spreads; if not, the move may fade.

Switzerland’s SECO Consumer Climate index rose to -31 (-33 expected, -34 prior), marking a modest improvement in sentiment and a slightly better-than-forecast reading. Even so, the level remains firmly in negative territory, suggesting households are still cautious—typically consistent with restrained discretionary spending and a slow-moving recovery in domestic demand.

Market impact: Generally limited for CHF on its own. A marginally better sentiment print can be mildly supportive for Swiss growth expectations, but CHF direction remains driven mainly by global risk tone, rate differentials, and SNB communication.

New Zealand’s Ministry of Foreign Affairs and Trade urged New Zealanders currently in Iran to leave immediately, saying the government has been in contact with 39 registered New Zealand citizens in the country after two weeks of deadly unrest. MFAT said New Zealand’s embassy in Tehran remains operating, but warned its ability to provide consular assistance is extremely limited, underscoring that conditions on the ground could constrain help if the situation deteriorates further.

Spain’s business sentiment softened slightly in December. Business confidence fell to -3.5 from -3.2 previously, indicating firms became a bit more cautious about conditions heading into year-end. While the move is modest, it suggests confidence remains fragile even as some hard activity indicators (such as industrial production) have recently improved.

Market impact: Largely EUR-neutral—a small sentiment dip in one country rarely moves the currency. For Spanish assets, it modestly tempers the near-term growth tone unless followed by weaker PMIs, hiring, or investment indicators.