Intesa Sanpaolo : COVID-19 in the euro area: containment measures, albeit increasingly ill-tolerated by the population, are successfully reducing new infections.
Weekly Economic Monitor – 09. April 2021
Intesa Sanpaolo – Research Department
The vaccines are starting to contain mortality. The intensity of the vaccination campaign has increased, but the further progress expected for this month could be slowed constraints on the use of the AstraZeneca vaccine. The overall level of stringency eased in March, should remain stable in April, and is expected to ease significantly in May and June.
The FOMC minutes: guidance implies that the reversal on rates and purchases will depend on the “actual progress” made towards achieving the targets for prices and employment, and not on forecasts. The credibility of the Fed will be put to the test sternly in the next few months, when a string of positive indications on the progress towards its dual mandate is expected.
The week’s market movers
In the euro area , February data on industrial output should show a slight increase in Italy and a contraction in the Eurozone as a whole; we expect a growth of activity in March, as indicated by monthly surveys. Also in February, retail sales in the Eurozone should recover somewhat after dropping in January. The German ZEW index will be the first confidence index for April to be released and should outline a new improvement of expectations, after the progress made over the previous four months. The approval of the Economic and Financial Document in Italy will also be in the spotlight. Lastly, the second estimate of consumer prices in March will confirm the uptrend of inflation in the Eurozone, Germany and France, and a slowdown of HICP in Italy.
A host of important data releases are lined up this week in the United States. Initial surveys for April should be positive, both in terms of manufacturing activity (Empire, Philadelphia Fed) and of consumer confidence (Univ. of Michigan). March data will include inflation, expected to accelerate, with the CPI on the rise by 2.5% y/y, and a first taste of the comparison effect with 2020. Retail sales, industrial output, and housing starts, should all increase at solid rates, more than making up the ground lost in February.
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