Intesa Sanpaolo : Brexit : How much is a potential free trade agreement between the United Kingdom and the European Union worth?
Weekly Economic Monitor – 16. October 2020
Intesa Sanpaolo – Research Department
Unsurprisingly, macroeconomic simulations indicate that, in relative terms, it would be worth more for the United Kingdom than for the euro area.
The near-term impact does not compare in any way to the impact already reaped by Covid-19 on the UK’s import-export trade.
The week’s market movers
In the Eurozone , the first set of October confidence data could send mixed signals, influenced by the differing trends of new Covid-19 infections in the various countries and by specific characteristics of different surveys. The PMIs, designed to measure the monthly change of business activities, could outline a decline of both the manufacturing and, to a greater degree, services index. On the other hand, the national surveys should indicate that the economic activities, especially the manufacturing, are experiencing a further recovery and moving closer to the norm (in the month, both the French INSEE index and NBB economic confidence index are forecast to improve).
In the United States , forthcoming macroeconomic data will be overshadowed by the run-up to the election. October flash PMIs are forecast in line with the indications provided by regional surveys, that point to ongoing expansion both in the manufacturing and non-manufacturing sectors. Housing starts, and existing home sales in September, should confirm the boom under way in the residential housing sector, mitigated by supply constraints and by the lack of homes on the market.
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