Intesa Sanpaolo : ECB : the monetary policy meeting of 10 December should expand and extend the PEPP, as well as encourage demand for funds at the next TLTRO III auctions.
Weekly Economic Monitor – 04. December 2020
Intesa Sanpaolo – Research Department
The growth forecast for 2021 will be lowered, as opposed to an upward revision of estimates for 2020(and, possibly, for 2022).
COVID-19: the second pandemic wave is regressing in Europe, while it is intensifying in North America. In Europe, a cautious relaxation of the restrictive measures has already started, and will support a resumption of economic activity between December and January.
The week’s market movers
In the euro area , focus will mostly be on the ECB meeting (see above). The German ZEW index (the first confidence index referred to December), should outline a further correction, after also declining in the two previous months. Data on industrial production in October will also be released in the three major countries of the Eurozone: we expect output to increase slightly but just temporarily, since in November manufacturing should also start to feel the impact of the new social distancing measures introduced in most euro area countries, albeit less so than services.
This week, only a few noteworthy data releases are lined up in the United States . Focus will be on the November CPI, forecast to rise modestly, after the flat monthly reading seen in October, with a confirmed lack of upside pressures on consumer prices. Consumer confidence in December should be little changed, with a marginal increase of the coincident index and a correction of expectations.
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