James Picerno | Apr 08, 2015 01:44AM ET
Europe’s budding economic rebound is in focus again today with the monthly update on new orders for manufacturers in Germany. We’ll also see new numbers on retail sales for the Eurozone. Later, the weekly release on US mortgage applications will provide fresh perspective for deciding if there’s a spring revival in progress for housing.
The economic heart of the Eurozone continues to impress with upbeat numbers. Yesterday’s March release of business survey data for Germany’s services sector, for instance, delivered a solid signal for growth. The purchasing managers index (PMI) ticked up to a six-month high, supported by stronger growth in new orders and increased hiring.
Analysts have been upgrading growth projections too. The median estimate for GDP growth for 2015 is currently 1.8%, based on 33 forecasts from banks and other sources, according to FocusEconomics. That’s up from a 1.6% prediction 30 days ago and 1.4% two months earlier. The current forecast is still modest, although the upward trend lately implies that additional upgrades may be coming.
Perhaps we’ll see the case for continued optimism in today’s monthly release on factory orders, which will provide fresh data for stress testing the case for elevating expectations for Europe’s main economy. Recent data, however, have been choppy, with both the monthly and year-over-year comparisons swaying back and forth between gains and losses.
Today’s update for February is expected to move back into positive territory for both comparisons after January’s declines. Econoday.com’s consensus forecast calls for a 0.8% increase for the annual change, a solid rebound from January’s 0.3% slide. We haven’t seen back-to-back gains for the year-over-year data since last summer. But given the recent improvement in the macro outlook for Germany and the Eurozone, perhaps today’s expected rise in factory orders will mark the start of new phase of sustained growth.
08:10 GMT , just ahead of Eurostat’s retail spending report. With both releases in hand, we may be able to clarify what’s really going on for Europe’s retail trend.
Meantime, the case for projecting growth for the Eurozone overall looks compelling, based on a range of data. That includes retail sales. As such, it wouldn’t be surprising to learn that today’s PMI reflects a brighter tone in today’s estimate for March.
said last week.
Is the return of weekly increases in loan applications a sign that the housing market is returning to a solid growth trend? It’s too early to say for sure, but the case for answering “yes” will rise a notch or two if today’s update marks the third straight weekly rise.
Disclosure: Originally published at Saxo Bank TradingFloor.com
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