Intesa Sanpaolo: An ECB policy rate hike by the end of 2022, as the markets are starting to price in, does not seem compatible with the expected trend of inflation next year and with the new monetary policy strategy approach.
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Weekly Economic Monitor -15 October 2021
Intesa Sanpaolo – Research Department
The week’s market movers
October PMI surveys in the euro area, and the INSEE survey in France, should confirm that the recovery in the Eurozone is now decelerating, against a background of supply-side bottlenecks. The European Commission’s consumer confidence index is also expected to worsen in October, probably affected by higher energy prices. Lastly, final estimates should confirm the rise of both headline and core Eurozone inflation in September. The Italian Government should approve the Draft Budgetary Plan for 2022.
This week a number of important data releases are lined up in the United States. Business surveys should confirm activity growth in October, as well as the presence of supply-side bottlenecks and upward pressures on prices. In September, industrial output, housing starts, and existing home sales are forecast to increase moderately, signalling positive growth, despite supply-side bottlenecks.
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