Euro Area Manufacturing PMIs Due, Focus Turns To Spain And Italy
Danske Markets | Sep 01, 2014 03:31AM ET
Market movers today
Focus will be on European and Asian data with the US closed for Labour Day.
In Germany the second release of GDP growth together with first estimates of its components is due. The economic contraction of 0.2% q/q in Q2 should be confirmed, but we expect private consumption to have increased. The slowdown was due to weak production as a result of the strong currency, weakness in the US and China in Q1 and uncertainty about the Ukraine crisis at the end of the quarter.
Euro-area manufacturing PMIs are due for release and focus will be on the first estimate of the Spanish and Italian figures. Based on the flash PMIs for the euro area we expect the periphery PMIs to decline in August. The Spanish PMI has trended upwards during 2014 consistent with higher economic activity, while the Italian PMI has weakened recently but remains stronger than the latest GDP figures.
The rest of the week will be very interesting. We expect no rate cut or QE from the ECB but all options should be left open in a very dovish statement. In the US we expect the labour market to show strong gains in employment in August. Bank of Japan should acknowledge increasing downside risk from the consumption tax hike but new easing measures are unlikely until late October. In Sweden Riksbanken is expected to remain on hold and keep its repo-rate forecast broadly unchanged.
Danske Daily - 1 September 2014
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