Monday, November 9, 2009

EMU Economic Indicators Preview (Week of 9 to 15 November 2009)

  • German / EMU GDP (Q3): up
  • German ZEW economic sentiment (November): slight rebound
  • Output in the German producing sector (September): up
  • EMU industrial production (September): unchanged

The German ZEW economic sentiment is likely to have rebounded in November. The ifo business expectations and the US ISM manufacturing index have both improved. German yield spreads have widened, because long-term interest rates have increased while short-term rates have decreased slightly. Moreover, the euro has depreciated recently. However, the DAX has gone down and crude oil prices have risen.
German GDP growth will probably have picked up quarter-on-quarter in Q3 2009, just as output in the producing sector did. On 13 November, Destatis (the German Federal Statistical Office) is publishing its “flash release” on German Q3 GDP; a detailed breakdown of the components will follow on 24 November. Investment in machinery and equipment is expected to have decreased once more. However, government and private consumption, construction investment and net exports might have contributed positively, at least to some extent, to overall GDP growth. French, Italian and EMU GDP are all likely to have increased in Q3 too.

Output in the German producing sector and French industrial production probably continued to improve in September, just like most of the correlated indicators. However, Italian industrial production is likely to have suffered a setback in September, after having soared unexpectedly in August and because Italian business confidence deteriorated in September. Therefore, EMU industrial production is expected to have remained more or less unchanged in September.

Following their usual seasonal pattern, the German trade balance and current account could have improved in September.

Final HICP inflation in the eurozone will probably be confirmed at -0.1% yoy in October; this would correspond with a monthly inflation rate of up to 0.3%. In November, year-on-year inflation is expected to return into positive territory for the first time since April.

This report has been prepared by BHF-BANK Aktiengesellschaft on behalf of itself and its affiliated companies (together "BHFBANK Group") solely for the information of its clients.
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