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Intesa Sanpaolo : A shot in the arm (for some)

Intesa Sanpaolo : A shot in the arm (for some) – The pandemic’s grip on the global economy is starting to weaken, also thanks to the advancement of the vaccination campaigns.

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Weekly Economic Monitor – 26. March 2021

Intesa Sanpaolo – Research Department


The 2021 rebound will be driven by Asia and the United States. The comeback of inflation will be amplified by transient factors: the peaks hit in 2021 will not be matched in 2022. Monetary policies will remain markedly accommodative, although in 2022 an initial tapering of asset purchases should begin. However, the diffusion of the vaccines is still limited to only a few advanced countries: as well as preventing a full normalisation, this leaves open the risk of new strains of the virus reducing the effects of the vaccines, delaying the process.

The week’s market movers

In the euro area , the round of March confidence survey releases will be completed, by the European Commission’s composite index, the second reading of the manufacturing PMI and consumer confidence in France. All the main indices will be confirmed on the rebound in March, thanks to good news on the supply of vaccines, and on the recovery of global trade. The recovery trend should continue in the coming months. The flash estimate of consumer prices should recover on a monthly basis in March, propelled by energy, with year-on-year changes on the rise compared to a month ago both in the Eurozone as a whole, and in many of the major member states. Also in March, unemployment is forecast stable in Germany. Lastly, consumption is expected to have improved in February both in France, and in Germany.

Busy calendar of data releases in the United States next week, as the main macroeconomic information for March is lined up. The Employment Report should show further improvement, with NFP growth at close to 600k, a decline of the unemployment rate to 6.1%, and higher participation rate. The manufacturing ISM should improve from already historically high levels and consumer confidence should confirm the opening of an uptrend phase. Construction spending is forecast to be down in February, largely due to adverse weather conditions last month.


Appendix
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Source: BONDWorld