Intesa Sanpaolo : ECB . Despite lower projections on GDP growth and core inflation, the ECB raised official rates again by 25bp: the depo rate rises to 4.0%.
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Weekly Economic Monitor – 15. September 2023
Intesa Sanpaolo – Research Department
Now, however, we enter the maintenance phase of the tightening: barring any shocking data, no more moves are to be expected for a few months. However, rate cuts will require a drastic improvement in inflation projections and expectations.
Federal Reserve. In light of recent macroeconomic data, the most likely outcome of the FOMC meeting on 19-20 September is a suspension of rate hikes, with a restrictive bias maintained.
The week’s market movers
In the euro area , three of the most important confidence indices will be released in the week, referred to September: the French INSEE, the flash PMI estimates for the Eurozone (as well as for Germany and France), and the European Commission’s consumer sentiment index. The surveys should confirm the weakness of the euro area economy. Output in the Eurozone construction sector should rebound in July, in line with the data already released in the main countries. Finally, again for the euro area as a whole, the final consumer price estimate for August is expected to confirm stable inflation at 5.3%.Next week in the United States the spotlight will be on the FOMC meeting, that should end with the Fed putting its restrictive cycle on hold, while keeping a tightening bias. August data on the real estate market August should report a decline in new housing starts and building permits, as opposed to a slight increase in existing home sales, still supported by solid demand for single-family units. The first set of September surveys could confirm the recession in the manufacturing sector and show a loss of momentum in services.
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