Intesa Sanpaolo: ECB : following the April monetary policy meeting, some national central bank governors spoke out in support of further bringing forward the start of the interest rate hike cycle.
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Weekly Economic Monitor – 22 April 2022
Intesa Sanpaolo – Research Department
One member of the Executive Board, Vice President De Guindos, also showed openness to an interest rate increase on 21 July. Had views in this direction prevailed already on 14 April, some indication would probably have been provided during the press conference, but this was not the case. However, it is now clear that, this option will at least be discussed at the June meeting.
Second round of the French presidential elections : chances of outgoing President Macron being reconfirmed in office seem to have increased over the past two weeks. The crucial factors will be the behaviour of Mélenchon’s voters, and abstention.
The week’s market movers
Numerous important data releases are lined up this week in the euro area . The initial estimates of GDP growth should draw the picture of essentially stagnant economies in Germany, France and in the Eurozone as a whole in Q1. On the other hand, the Italian and Spanish economies may have contracted. Consumer price figures in April, on the other hand, should report inflation declining modestly in Germany and in the euro area, and accelerating in Italy and France; risks over the following months remain skewed to the upside. The surveys conducted by Istat in Italy, Ifo in Germany and by the European Commission in the euro area should outline a further deterioration in sentiment in April, as a result of international tensions.
The data out this week in the United States should draw a positive picture of the economic scenario. Consumer confidence surveys for April are expected to improve moderately, thanks to a persistently strong labour market. March data will include durable goods orders, expected to improve, with favourable signals for business investment. On the other hand, new home sales should confirm the slowdown of the housing sector. Personal spending and personal income are forecast higher in March, with consumer spending on services accelerating. The March PCE core deflator should be up by 0.3% m/m, marking a temporary slowdown of its monthly trend. Lastly, the initial estimate of 1Q GDP growth, forecast at 1.1% q/q ann., should be held back by negative contributions from inventories and net exports, as opposed to solid increases in consumption and investment.
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