Euro-Zone Economy Quickens as Hit From Tariffs Approaches

The euro-area economy expanded a better-than-expected 0.4% in the first quarter, although the impact of US trade tariffs have yet to be felt. Germany and France grew in line with expectations, while Italy did better than economists had forecast.

But there are clouds on the horizon. Business surveys indicate a growth weakening amid uncertainty over US intentions. The European Central Bank is considering further interest-rate cuts after a seventh reduction earlier this month, although its Chief Economist Philip Lane said last week there’s unlikely to be a recession.

Separately, the US economy contracted for the first time since 2022, according to an initial estimate published today. US gross domestic product shrank because of a pre-tariff surge in imports and moderating consumer spending. The Federal Reserve’s preferred measure of inflation was unchanged in March from the previous month, another report showed.

Ukraine is ready to sign a natural resources deal with the US, a source tells us. Ukrainian Economy Minister Yulia Svyrydenko is on her way to Washington for the signing, which could happen as soon as today. A deal, which will allow the US privileged access to new investment projects to develop Ukraine’s natural resources, could bolster Washington’s support for Kyiv by strengthening their economic partnership.