Makroökonomische Daten: 10 – 14 Dezember 2012 (Englisch)

Dez. 7, 2012

Minute Read

This week in the euro area the first set of confidence surveys for the month of December will be published (ZEW and PMI), and should prove less pessimistic, also in the wake of easing tensions on the financial markets………..

The final estimate of inflation should confirm a 2.5% decline in November, from 2.6% the previous month (explained by a slackening of pressures from the energy component). Industrial output in the area is expected to rebound marginally in October after contracting sharply in September, although prospects for productive activity point to a further weakening in the months ahead. The second estimate of Italian GDP will highlight that the -0.2% q/q decline over the summer months was mostly tied to a drop in domestic consumption, as opposed to a still positive contribution from net exports. Wednesday’s ECOFIN meeting will reopen talks on the Banking Union, but there is no guarantee that progress will be made compared to last Tuesday.

Busy calendar of releases this week in the United States. November data should generally prove weak. Consumer, producer, and import prices should be driven down by a correction in the energy sector. Retail sales are expected to drop, net of the auto component, whereas the transport item should record a sharp rise. Industrial output is estimated to have declined, hit by the effects of hurricane Sandy and by concerns over the fiscal cliff. The trade balance deficit is expected to have widened back in October, mostly due to a drop in exports, due to the activity and transport shut-down caused by the hurricane. The FOMC meeting should bring the introduction of a Treasuries purchase programme to replace Operation Twist; as regards communication, a change to the guidance on rates in early 2013 is expected to be preannounced.

Monday 10 December
Euro area
– France. Industrial output is expected to have slowed further in October, albeit marginally, after the previous month’s sharp contraction. The index should decline by two tenths on the month (from -2.7% in September), mostly driven down by weakness in the energy sector.

Manufacturing output should prove broadly stable (-0.1% m/m). In year-on-year terms industrial output should be down by -2.4%, from -2.5% the previous month. The weakness of the industrial sector, anticipated by confidence indices, should continue into the opening months of 2013.

– Italy. Industrial output is set to drop further in October (-0.5% vs. -1,5% m/m in September).
Year-on-year, output would show a recovery in unadjusted terms (a -4.3%), but be more negative when adjusted by workdays (to -7.2%). In light of the negative end to the previous quarter, and of the high probability of the contraction continuing in the months ahead, the reading paves the way for a new decline in industrial output this quarter, after stabilising over the summer. Therefore, industry will once again represent a drag on GDP growth in 4Q, after contributing positively to value added in the summer months. This is compatible with our expectations for a new acceleration in the pace of GDP contraction in the closing months of the year.

– Italy. The final estimate of 3Q 2012 GDP growth should confirm the -0.2% q/q preliminary reading, therefore showing a moderation in the pace of contraction after the -0.7% q/q dip in the spring. The second estimate will provide important information on the trends of GDP components: our forecasts are for an even sharper contraction in consumption and investments (although the drop could prove to be smaller than in previous quarters, for investments in particular), whereas net exports should continue to contribute positively to growth. Forecasts for the present quarter point to a new reacceleration in the contraction of GDP, after the stabilisation seen in the summer months, as anticipated by confidence indicators. Growth in 2012 as a whole should level off at -2.1%, and our estimate is for a -1% decline in 2013.

Tuesday 11 December
Euro area
– The Ecofin will resume talks over the European Banking Union. Asmussen, of the ECB, said that the pledge to complete the legal framework for the Banking Union by the end of the year can no longer be met. There are still significantly diverging views between the Germany and France. The ministers of finance should also discuss an assistance plan for Cyprus.

– Germany. The confidence index drawn up by interviewing analysts and institutional investors on the German economy (ZEW) could show a slight improvement in December, due in part to easing concerns over sovereign debt. Both the assessment of the current situation, and expectations for the next six months could rise back after deteriorating in November, returning to their previous levels: specifically, we expect the two indices to improve respectively to 8 (from 5.4) and -8.5 (from -15.7).

United States
– The October trade balance should show a deficit of 43 billion dollars, from 41.5 billion in September. Exports should be down mostly a result of the effects of hurricane Sandy on productive activity and on transport. In the wake of hurricane Katrina the trade deficit widened significantly: although Sandy was less devastating, the direction of the trend should be similar. Also, imports had grown at a much sharper pace than exports in September, also driven by price increases (0.8% m/m): in October, export prices were stable. As regards imports, a moderate increase is expected, as a result of higher import prices (+0.5% m/m).

Wednesday 12 December
Euro area
– Germany. The second reading of November inflation should be confirmed at 1.9%, while the harmonised rate should level off at 2%, compared to 2% and 2.1% respectively in October.

In the month, the price index should therefore be down by 0.1% for both measures. Energy price moderation is the main reason for contained inflation, which should persist into the opening months of 2013.

– Industrial output in the euro area is expected to rebound by two tenths in October, after contracting sharply in September (-2.5% m/m). In year-on-year terms the decline would therefore deepen to -2.5%, from -2.3% the previous month. The September drop was widespread, and led by Ireland and Portugal (which recovered in part in October). Beyond the expected rebound in October, industrial output should stay weak at the close of the year.

– France. Inflation is expected to moderate to 1.6% in November, from 1.9% the previous month, with the consumer price index staying broadly unchanged in the month. Harmonised inflation is estimated at 1.8% from 2.1% in October (the harmonised index is also expected to come in flat month-on-month). Inflation moderation is due to falling oil prices, and should continue into the opening months of 2013.

United States
– Import prices in November should be down by -0.4% m/m, marking the first decline after three months of sharp increases. The drop should be the result of a correction in oil prices.

The recent strengthening of the exchange rate should contain the price increase net of oil.

– At its meeting on 11-12 December, the FOMC is expected to announce a new asset purchase programme in replacement of Operation Twist, due to end this month. The Fed should purchase around 45 billion dollars a month in Treasury bonds with maturities of between 6 and 30 years, until the “until labour market conditions improve substantially”. Purchases on the long end of the curve should therefore be kept at around 85 billion a month (with MBS purchases of 40 billion a month). The statement, and most importantly Bernanke’s press conference, should signal that a change in communication is being prepared, establishing inflation and unemployment thresholds as necessary conditions, albeit not sufficient, to consider Fed Fund rate changes. In 2013, monetary policy will continue to limit the effects of a restrictive fiscal policy

Thursday 13 December
Euro area
– Spain. The November Inflation rate should confirm the preliminary reading at 3% for the national measure, and 2.9% for the harmonised, both on the decline from 3.5% in October.
The first release surprised consensus on the downside, as an expected unfavourable seasonal effect was smaller than estimated. In the months ahead, inflation tensions will continue to be fuelled by the effects of the VAT rate hike, although the trend is expected to moderate in the second half of 2013.

– Italy. The second estimate of November inflation should come in at 2.5%, in line with the preliminary rate, down from 2.6% in October, with a 0.2%drop in the consumer price index; harmonised inflation should also be confirmed at 2.6% (from 2.8% the previous month), with the index on the decline by 0.3% in the month. The drop in energy prices has guided the moderation of inflation, which is expected to continue until the end of the year.

United States
– The November PPI is estimated to be down by -0.5% m/m (1.7% y/y), marking the second consecutive monthly decline. The drop should be explained by the energy component (-2.5% m/m), driven down by the contraction in gasoline prices, as opposed to a rather strong increase in food prices (+0.5% m/m). The core PPI should shoe a 0.1% m/m increase (vs. – 0.2% m/m in October). In October, the core index had dropped on the back of auto prices, as
a result of the prices of the new models introduced in the month: the November index should not be affected by special factors.

– Retail sales in November should be up by 0.3% m/m. Auto sales are expected to prove very strong, back on the levels abandoned due to hurricane Sandy in October: based on dealership data, volumes increased by 8.7% m/m in November. Retail sales net of the auto component are expected to have dropped by -0.2% m/m, with a correction of the gasoline item as a result of lower prices.

Friday 14 December
Euro area
– The first estimate of December PMIs should bring an improvement, to 46.8 from 46.5 for the composite index. Reduced pessimism should be recorded both by the manufacturing index (up to 46.6 from 46.2 in our estimation) and the services PMI (to 47 from 46.7 in November).
Easing tensions on the financial markets may have helped curb pessimism, although the road to exiting the recession is still long.

– Inflation in the euro area should be confirmed on the decline to 2.2% y/y in November, from a previous rate of 2.5%. In the month, consumer prices are expected to be down by -0.2% m/m. In our scenario, inflation will fall significantly in the months ahead, dropping below 2% already in the opening months of 2013.

United States
– The CPI is forecast to drop by -0.3% m/m in November, compressed by lower gasoline prices.
The expected change for the core index is 0.2% m/m (2% y/y). In November, clothing and apparel prices should stabilise, after rising considerably in October (+0.7% m/m), as opposed to a slight increase in the auto segment. As regards the shelter item, rents are expected to drop somewhat, after their recent acceleration: the shelter component net of energy should show a 0.2% m/m increase.

– Industrial output should be flat in November, after dropping by -0.4% in October. The November reading will probably continue to feel the effects of hurricane Sandy, with a modest correction in manufacturing activity. However, the sharp rise in auto sales is expected to have boosted activity in the sector, after the October slowdown, supporting the overall change in the manufacturing component

Appendix

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