Saturday, November 27, 2010

Data Monitor – Preview Europe

Monday, 29 November
CIB Cons. Oct Sept
105.0 105.0 104.1 103.2

In October, the ESI rose to its highest level since end-2007. This improvement was led especially by the industrial component. Economic confidence should improve further in November, consistent with the jump in the German Ifo, the Belgian business confidence and the flash PMIs.

According to the preliminary estimate, consumer confidence rose as well. All these surveys were stronger than expected and led us to raise our 4Q GDP forecast to 0.4% from the previous 0.2%-0.3% – with risks skewed towards a firmer reading.

Tuesday, 30 November

November CIB Cons. Oct Sep
in ’000 mom, sa -20 -20 -3 -37
in ’000 mom, nsa 0 -- -86 -157

In November, the still relatively mild temperatures and the strong economy probably still prevented a perceptible spike in the normal winter unemployment. Overall, corporate hiring plans remain in an updraft. In November, the employment component of the Manufacturing PMI even hit a new record high. Accordingly, adjusted unemployment should again have fallen more strongly than in the previous month. And the prospects also remain rosy for the coming months.

November CIB Cons. Oct Sept
in % mom 0.0 -- 0.2 -0.2
in % yoy 1.7 1.8 1.7 1.6

In October, Italy’s CPI inflation accelerated to 1.7% from 1.6% in August-September. The inflation rate is
expected to remain unchanged in November, and hover around the current level also in the next few months. In yearly average terms, CPI should be up 1.5% in 2010 and 1.9% next year.

November CIB Cons. Oct Sept
in % yoy 1.9 1.9 1.9 1.8

After October's unexpected acceleration to 1.9% yoy, the highest reading in almost two years, in November the inflation rate should stabilizes, with risks tilted to the upside. After having remained at 1% for three months in a row, core inflation accelerated slightly to 1.1% in October and is expected to hover around this level also in November.

Wednesday, 1 December

November CIB Cons Oct Sept
Manufacturing 54.5 54.8 54.9 53.5
Services (Friday, 3 Dec.) 52.8 53.1 53.2 52.8

In October both the manufacturing and services PMI rose decisively, against our expectations of a moderate
decline. In November, we are unlikely to see a further improvement from current level, and we are penciling in
some correction. Still at these levels the PMIs signal a decent pace of economic expansion so far in 4Q.

October CIB Cons. Sep Aug
in % mom 1.5 1.2 -1.7 -0.5

Powered by the solid situation on the labor market, consumer confidence recently rose to its highest level
since October 2007. In the process, there was a tangible improvement in the willingness-to-buy. After the last two disappointing monthly readings for retail sales, we therefore see clear upside potential in October as well as during the holiday shopping season.

Thursday, 2 December

3Q10 CIB Cons. 2Q10 1Q10
in % qoq 0.4 0.4 1.0 0.3
in % yoy 1.9 -- 1.9 0.8

Eurozone GDP growth slowed down in 3Q (at +0.4% qoq) after the strong 1% outcome recorded in 2Q. In
regard to the expenditure breakdown, we have penciled in ongoing moderate growth in private consumption, a clear slowdown in investment activity – with a moderation in capex and a renewed contraction in construction investment – a tamer positive contribution from inventories and still positive net exports.
Full report: Data Monitor – Preview Europe

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