Makroökonomische Daten: 12 – 16 November 2012 (Englisch)

Nov 9, 2012

Minute Read

Preliminary 3Q GDP data is due out this week in the euro area. Economic activity in the euro area is expected to have slowed by just one-tenth over the Summer, in line with the average for the past year, compatible with the confirmation of a “moderate” recession path……..

The only major country to achieve positive GDP growth will be Germany, whereas economic activity is forecast to have remained stable in France, and to have further contracted in Spain and Italy (in the latter country, however, the pace of the contraction will be slower than in the first half of the year). In any case, in all the main countries, and in the euro area as a whole, a sharper slowdown in economic activity only seems to have been pushed back to the present quarter. As regards the other data releases due, the November ZEW survey could carry on its recent trend of easing pessimism in terms of expectations, as opposed to a deterioration in views on the current situation. Industrial output in the euro area will confirm the crash recorded in all the major countries in September, and October inflation should again be down by one-tenth, to 2.5%.

Busy calendar of data and events in the United States next week. The first manufacturing sector surveys for November will start to incorporate the effects of Hurricane Sandy, and should show a deterioration. Retail sales are expected to have dropped in October for the first time in three months, and industrial production is estimated to have contracted. The October CPI and PPI should show very moderate increases, for both the headline and core indices. The minutes of the October FOMC meeting should contain openings to expand QE3 once Operation Twist is over, and indicate that the debate is on over changes in communication.

Tuesday 13 November
Euro area

– Germany. Expectations for the German economy on a six-month horizon, as included in the ZEW survey, have probably changed little in November (-11 from -11.5 in October), as opposed to a further deterioration in the assessment of current conditions (to 7.5 from 10 previously). The German economy is starting to be tangibly affected by the slowdown in peripheral countries.

Wednesday 14 November
Euro area

– Industrial output is expected to be down by a hefty 2% m/m in September, given the disastrous trends recorded almost throughout the euro area (Germany -2.1%, France -2.7%, Italy -1.5%, Spain +2.8%; particularly sharp decreases were recorded in Portugal, -12% m/m, and Ireland, -12.6%). Output should in any case score a 0.4% q/q rise in the summer months (first quarter of positive growth in a year), given the sharp increases recorded in July and August, although a decline is only postponed to the end of the year.

– France. Consumer prices are expected to come in stable compared to October, with year-onyear inflation down by three-tenths to 1.6% at the national level, and the harmonised index on the decline to 1.8%. The balance of risks to the forecasts is skewed to the downside. As in the rest of the euro area, in the month downside pressures came from the energy component, as opposed to seasonal price increases in other sectors.

United States

– The October PPI is forecast to increase by 0.2% m/m; the core index should stay flat. The headline index based on survey data collected in the first part of the month will only record a stabilisation over the opening two weeks of October: November data, on the other hand, will price in the correction of around 6% which occurred between 18 October and the first week of November. The core index should feel some downside pressures tied to auto prices.

– Retail sales should have stalled in October, after growing at a good clip for three months (+1% m/m on average). Overall sales are expected to have dropped by -0.2% m/m (the first monthly decline since June); net of auto sales, retails sales are estimated to have increased by 0.3% m/m (vs. +1.1% m/m in September). Overall sales will mostly be conditioned by the auto sector decline (dealership sales down to 14.2 million from 14.9 in September). Data exauto will incorporate the effects of Hurricane Sandy: the food, health care, and home ware segments will be inflated by pre-hurricane provisioning, whereas in the other segments sales will be heavily affected by the shut-down of activity for several days. November data will also be impacted by the hurricane.

– The minutes of the October FOMC meeting will probably tell of intense debate over communication and the expansion of QE3. Based on recent statements, it is clear that active discussion is taking place on the option of tying stimulus to the level of macroeconomic variables (unemployment), rather than to calendar dates. However, for the time being there still seems to be no clear consensus, and we believe both the minutes and the December meeting will signal the intention to keep analysing the issue, while buying more time. As regards QE3, some information could emerge on what the FOMC intends to do in December, when Operation Twist (OT) will be over: we expect purchases at the long end of the Treasuries curve, made within the framework of OT, to be maintained, but financed through an outright expansion of the Fed’s balance sheet.

Thursday 15 November
Euro area

– GDP growth in the euro area is expected to have slowed by only one-tenth in the summer months, as opposed to -0.2% q/q in 2Q. The reading is in line with the average over the past year, and keeps the euro area as a whole on a “moderate” recession path. However, the risk is that a sharper contraction could materialise in the closing three months of the year. GDP is expected to have dropped year-on-year to -0.6% y/y in the summer quarter. The only major country of the EA to achieve positive GDP growth will be Germany (+0.2% in our estimation, from +0.3% in the summer quarter, resulting in a two-tenth slowdown to 0.8% in year-onyear terms); however, Germany too could suffer a slowdown in the present quarter. In France, GDP is expected to have stayed stable in the summer quarter, given the resilience shown by both consumption and industrial output; year-on-year GDP is also expected to come in flat (vs. a previous rate of 0.3%). In Spain, GDP growth should be in line with the preliminary reading of -0.3% q/q, -1.6% y/y. In Italy, economic activity is expected to have dropped at a slower pace than the -0.8% q/q rate recorded in the first half of the year; our estimate is -0.4% q/q, in light of the stabilisation (for the first time in a year) of value added in the manufacturing sector, with a further negative contribution from services (and the construction sector) nonetheless .

– Inflation should be confirmed at 2.5% y/y in October, with prices on the rise by two-tenths in the month. The trend net of the food and energy components is expected to prove stable at 1.5% y/y (with a marginal risk of a one-tenth increase). Based on our central scenario, inflation will drop significantly in the coming months, dropping below 2% already in the opening months of 2013.

United States

– The headline and core CPIs should be up by 0.1% m/m in October. The headline index will be cooled by stabilising gasoline prices, after the surges recorded in the two previous months; however, as will also be the case with the PPI, most of the correction of energy prices will be recorded by the PPI, November price index. The modest change of the core index should be due to a correction of auto prices and to a slowdown in the clothing and apparel segment.

Airline tariffs will show a sharp rise in September as well, although this will be a temporary development, given the drop in the price of oil in October-November. In year-on-year terms, inflation should stay at 2.2% y/y in terms of the headline index, and at 2% y/y in terms of the core index.

The NY Fed’s November Empire Index will be influenced by the effects of Hurricane Sandy.
Without the hurricane, an improvement would have been on the cards following the excessively negative level reached in October (-6.2), with a return to just above zero. However, the devastation caused by the hurricane, and its lasting consequences, will have a negative impact on the survey: the forecast is for a further drop, to -8.5, with a decline in activity and, possibly, a slowdown in orders, due to the slow return to normal operations in many sectors and areas. The indications of the 6-month forward-looking index could be more important this month, less influenced by the temporary, albeit dramatic, effects of the hurricane.

– The Philadelphia Fed index is estimated to drop in November to -1 from 5.7 in October. The correlation with the ISM would imply a correction of the index closer to 0, but the expected change is amplified by the effects of Hurricane Sandy. Also, the breakdown of October data was already less promising compared to the improvement of the composite index, with new orders slipping back into negative territory. October-November data will be hard to read due to the impact of the hurricane, on top of already only just positive growth in the manufacturing sector.

Friday 16 November
United States

– Industrial output in October should correct by -0.1% m/m. In the manufacturing sector, work hours and the slowing of activity in the automotive sector point to a change of zero. The impact of the hurricane, while limited to the last two days of the month, is expected to have negative effects on output in the utility sector.

Appendix

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