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Eurozone GDP growth beats expectations as inflation edges up and unemployment falls

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Annual inflation for the eurozone is expected to be 1.8% for January, up from 1.1% in December past year, according to the flash estimate from Eurostat.

Meanwhile, the eurozone inflation rate spiked to 1.8 percent in January, Eurostat also unveiled, a big leap from 1.1 percent a month earlier, and leaving it just shy of ECB's medium-term target of close to 2 percent.

Meanwhile, unemployment in the eurozone fell to 9.6 per cent, against expectations of 9.8 per cent and down nearly a whole percentage point from last year's 10.5 per cent.

Eurostat statistics show eurozone economic growth accelerated at the end of 2016, up by 1.8 percent in the fourth quarter from a year earlier.

Jan Randolph, Head of Sovereign Risk at IHS Markit, said in an email Monday that some investors have taken higher inflation in Germany as an excuse to shift out of bonds into equity.

Germany's job market has remained as strong as ever with the jobless rate down to 5.9 percent.

Prominent German economists and politicians are blunt in their warnings that monetary stimulus is going too far, even with inflation primarily driven by energy costs that the European Central Bank can't control. Although it was slightly down from the previous year's two per cent, the figure beat forecasts of 1.6 per cent.

The sharper rise was mostly driven by the energy sector (which inflated by 8.1% in January compared with 2.6% in December), and food and tobacco prices.

While here at home, the seasonally adjusted unemployment rate for January was 7.1%, down from 7.2% in December 2016.

The lowest level was reported for Germany - 3.9%, while Greece registered unemployment of 23%. Ewald Nowotny said on Monday that while developments in Germany are monitored, monetary policy can not cater to just one country, reasoning that the ECB's Governing Council won't make a decision on the future of QE until after the summer. Clothing chain H&M advanced 5.5% in Stockholm after posting an unexpected increase in pre-tax profit for the fourth quarter of past year and setting a new target for local-currency sales to increase at a pace of 10% to 15% annually, Reuters reported. Also, youth unemployment remains strikingly high in Italy (40.1%) and Spain (42.9%). He said this, combined with steady growth figures, was likely to increase pressure on the bank to return to normalised monetary policy for the region.

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