EMU Economic Indicators Preview (Week of 19 to 25 October 2009)

• German ifo business climate (October): more or less unchanged
• PMI manufacturing index EMU (October): up

The ifo business climate for Germany is likely to have remained more or less unchanged in October. Both the German ZEW economic sentiment and the US ISM manufacturing index have deteriorated. German yield spreads have been fluctuating, because long-term interest rates decreased initially and then recovered somewhat, while short-term rates have more or less stabilised. The DAX has improved, but the euro has continued to appreciate and crude oil prices have gone up recently. The results of the German election might have fuelled business expectations, but the current assessment could have gone down as a result of the car scrapping premium being phased out. For similar reasons, the Purchasing Managers' Index for the German manufacturing sector is only likely to have stabilised.

However, Belgian business confidence could have rebounded and both French business confidence and the Purchasing Managers' Index for the manufacturing sector in the EMU could have continued to improve in October.

French consumer spending might have rebounded in September, just as consumer confidence did. EMU industrial new orders will probably have increased in August, in the same way as the corresponding German figure. Following its usual seasonal pattern, the EMU current account is expected to have plummeted in August, just like the corresponding German figure and the EMU trade balance.

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