By Lucy O’Carroll, Chief Economist, Investment Solutions, Aberdeen
Here is a sight you seldom see: the eurozone economy outgrowing both the US and the UK. The first estimate of GDP growth for 2015 Q1 showed the region expanding by 0.4 per cent, compared with 0.1 per cent in the US and 0.3 per cent in the UK. Spain was the star turn, at 0.9 per cent, with France a surprise winner, too, at 0.6 per cent. Germany and Italy put in pretty solid performances, at 0.3 per cent, and even Greece — while once more back in recession — shrank less than expected. It isn’t only in its data that the eurozone has surprised in recent weeks: the region’s bond markets have been exceptionally volatile, with German bunds giving up around five months’ worth of price gains in the space of little more than five days. To what extent, if any, are the two events connected — and what do they tell us about the outlook for eurozone activity and markets?