In the euro area, April industrial output may show a slight recovery in the Euro Area as a whole and in France and a little change in output in Italy. In Italy, the final 1Q GDP reading should confirm the preliminary estimate of -0.5% q/q. The second reading of May inflation data in Germany and in the euro area should also confirm the flash estimates. The first reading in France is expected to outline a further slowdown in the CPI trend from its already very modest levels in April….
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Several important data releases are due this week in the United States. April retail sales should show a rather solid increase, driven by auto sales and by the stabilisation of gasoline prices; industrial output is estimated in marginally positive ground, despite weak manufacturing. As regards prices, the PPI should be down slightly in April, and import prices are expected to rise only marginally: the appreciation of the dollar is helping to cool price changes even beyond the movements tied to energy goods. Consumer confidence should brighten somewhat in June.
Monday 10 June
Euro area
– France. Industrial output could rebound by two tenths in April, from -0.9% m/m in March. If confirmed, the April index would leave output on course for a -0.1% q/q decline in the spring quarter, from -0.4% q/q over the winter. Business confidence surveys, while outlining a recovery in recent months, are still not showing a clear recovery in the manufacturing sector, although the pace of the contraction in activity is gradually slowing.
– Italy. Industrial output is expected to change little in April, after dropping by -0.8% m/m in March. The reading would translate into an improvement in the year-on-year rate to -0.2% (from -9.5%) in unadjusted terms, due to an extra work day compared to last year; net of this effect, output in the year would be down by -3.4% from -5.2% in March. Output remains lower by almost 25% compared to the pre-crisis peak (April 2008).
– Italy. The second reading of 1Q GDP should confirm the preliminary estimate at -0.5% q/q (from -0.9% previously) and -2,3% y/y (from -2.8%). Broken down data should once again outline a marked contraction in domestic demand (both consumption and investments are forecast to drop at a pace in line with the one recorded in at the end of 2012), whereas foreign trade is expected to contribute positively again; the contribution of inventories should also prove to be less negative than in the previous quarter.
Wednesday 12 June
Euro area
– Germany. The final reading of the Laender consumer price index should confirm the preliminary estimates of +0.4% m/m at the national level and +0.3% m/m in harmonised terms, leaving annual inflation on the rise to 1.5% from 1.2% in April at the national level, and to 1.7% from 1.1% in terms of the HICP. Inflation may rise further in Germany in the months between June and July, and subsequently ease back after the summer.
– France. Consumer prices are estimated to have dropped by -0.1% m/m in May (in line with April). The decline will almost entirely be due to the energy component, whereas the core component is estimated to have changed little in the month. Inflation would therefore drop further at the national level, to 0.6% from 0.7%, with the harmonised index down to 0.7% from 0.8%. Inflation should stay very moderate until the end of the year.
– Industrial output in the euro area as a whole is estimated to rise by 0.5% m/m in April, from +1% m/m in March, backed by German industrial output (+1.8% m/m in April). Year-on-year, the change adjusted by workdays would recover to -0.5% (from -1.6% in March). The reading would leave output on course for an increase for the second quarter in a row, by 1.3% q/q in the spring (+0.2% q/q in the winter months), after plunging (-2.1% q/q) at the end of 2012. Surveys signal a slowdown in the pace of contraction in economic activity in the industrial sector.
Thursday 13 June
United States
– Retail sales are expected to be up by 0.5% m/m in May; net of autos, sales should be up by 0.3% m/m. Motor vehicle sales in May grew more than expected, to 15.3 million ann. from 14.9 million in April, driven by a recovery in the sales of larger cars and pick-up trucks, also encouraged by competitive pricing by Japanese automakers due to the weakening of the yen. Weekly sales indices provided mixed indications, with the Redbook on the rise by 0.6% m/m, as opposed to a -2.2% drop in the ICSC index. The strong improvement in consumer confidence highlighted by all the surveys supports the prospect of strong sales in May.
– Import prices in May are expected to come in higher by 0.1% m/m, after contracting for two months in a row. The modest rise should be the result of a rebound in oil prices. Net of oil, the price downtrend is expected to continue, fuelled in part by the appreciation of the dollar, principally against the yen.
Friday 14 June
Euro area
– The final reading of inflation in the euro area should confirm the preliminary rate of 1.4%, vs. 1.2% in April. In the month, prices should be up by 0.1% m/m. Inflation net of the energy, food, alcohol and tobacco components should also be confirmed at 1.2% (from 1% in April). Inflation may rise to 1.5% in June-July, before turning back down in the second half of the year, also thanks to a favourable base effect in the energy component. In average annual terms, the CPI should level off at 1.4% this year, and 1.5% the next.
United States
– The May PPI is estimated to drop by -0.1% m/m. The stabilisation of gasoline prices should translate into a correction of the gasoline component of the index in seasonally adjusted terms. The core index is expected to rise slightly, by +0.1% m/m, with auto prices cooled by competition with Japanese manufacturers, aided by the depreciation of the yen.
– Industrial production in May is forecast on the rise by 0.2% m/m. Output in the manufacturing sector should be unchanged, in light of the information provided by the ISM and of ADP non-farm payrolls (down marginally, -5k).
– Consumer confidence as surveyed by the University of Michigan in June (preliminary) should be up again, from 84.5 in May (final) to 85.5. Confidence indicators are still rising across the board, despite having surged in April. Improving labour market conditions and the swift and widespread increase in home prices are the main confidence boosters. Indices are closing back in on the fluctuation range in place before the crisis of 2008.
Appendix
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