Economic data releases in the euro area should confirm that the recession will continue over the year turn. The final estimate of the November composite PMI should confirm the preliminary reading of 45.8; industrial output in Germany is expected to have recovered slightly in October……….
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Monday, 3 December
Euro area
– The Eurogroup of finance ministers convenes in Brussels. Do not expect other decisions on Greece (the formal approval of the tranche is already scheduled for December 13), nor on Cyprus (Cypriot Finance Minister has mentioned as most probable the dates of December 12-13 for the approval of the support programme). However, the meeting could start talking about the possible improvement in financial conditions applied by EFSF to the support programs for Portugal and Ireland. On Tuesday 4th an Ecofin meeting is also scheduled.
United States
However, the preliminary Markit PMI recorded a new increase. Data on orders in October pointed to a modest recovery of activity in the manufacturing sector.
– Construction spending in October is forecast to increase by 0.4% m/m, from +0.6% m/m in September. The sharp increase in housing starts recorded over the past few months indicates that construction in the residential segment may have marked a new, material increase. The public and non-residential segments, on the other hand, should stay in negative territory.
– Auto sales in November are expected to recover, to 15 million ann. from 14.2 million in October. The October reading was negatively affected by hurricane Sandy. Based on information made available by dealerships, a partial recovery of the October drop in sales should materialise in November, confirming the previous trend.
Tuesday 4 December
Euro area
Wednesday, 5 December
Euro area
The composite PMI should rise back marginally compared to October, confirming the preliminary estimate (45.8 vs. 45.7 the previous month), on the back of a recovery in manufacturing, that should balance a weaker reading in the services sector.
– Retail sales in the euro area will drop again in November, by -0.2%. although the pace of the decline will be slower than the previous month (-0.8%m/m). The drop at the beginning of the autumn is expected to have been driven by a very weak consumption trend in peripheral countries, and in Spain in particular. Household spending will be penalised by the slowdown in disposable income, impacted by lower employment levels and higher taxation.
United States
– The final estimate of productivity growth in 3Q 2012 should be revised upwards to 2.8% q/q from 1.9% q/q, given the upward revision of the GDP. Labour cost per unit of output should be revised downwards, to -0.9% q/q from -0.1% t/t.
– The November non-manufacturing ISM is forecast to be little changed, edging back to 54 from 54.2 in October. The October survey had corrected the excessive rise recorded in September. A stabilisation on levels close to September values would be in line with the 3-momnth moving average, and would continue to support a moderate uptrend from the lows hit in June.
Thursday, 6 December
– The detailed estimate of euro area GDP growth in 2Q 2012 should confirm a -0.1%q/q decline, and a year-on-year contraction of 0.6% y/y. Domestic demand is expected to be down by 0.5% q/q, with foreign trade making a positive contribution of 0.3%. In 2013,we believe growth will continue to be driven by foreign demand, whereas domestic demand should continue to contract, albeit at a slower pace (-0.8%) than in 2012 (-1.8%).
Friday, 7 December
Euro area
United States
Non-farm payrolls should be up by 85k, from +171k in October. The number of people employed in the manufacturing sector is estimated to have declined due to the effects of hurricane Sandy. The unemployment rate should be unchanged at 7.9%: risks to the estimate are skewed to the downside due to the effects of the hurricane on the participation rate.
Hourly wages are forecast to have risen by 0.2% m/m. Data should be treated with caution, given the transitory effects of hurricane Sandy, but are expected to confirm a gradual rise in employment.
– Consumer confidence as surveyed by the University of Michigan in November (preliminary) should improve modestly, to 83 from 82.7 in October.
Appendix
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