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Intesa Sanpaolo : Italy and the “ Decreto Rilancio”

Intesa Sanpaolo :  Italy. The “ Decreto Rilancio”, or “Relaunch Decree”, marks a turning point in Italy’s fiscal policy response to the Covid-19 shock, especially for businesses

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Weekly Economic Monitor – Weekly Economic Monitor – 15 May 2020

Intesa Sanpaolo – Research Department


 (thanks to the transition from mere liquidity support to grants, addressed in particular to SMEs and to the hardest hit business sectors).

The package will only buffer the effects of the shock during the acute phase of the emergency, but lays the foundations for a recovery of economic activity in the immediately following phase.

The week’s market movers

In the euro area , focus will be on the European Commission’s proposal for the Recovery Fund, expected to be unveiled on Wednesday.

The round of monthly surveys for May will provide new indications on how the economy is reacting to the initial easing phase of the contagion containment measures enforced over the past few months throughout Europe.

We expect the European Commission’s Economic Sentiment Index to rise back, in line with the levels recorded during the financial crisis of 2008-09. ZEW index for Germany should also reflect an improvement, especially for the current situation. PMI survey data could outline a rise from April lows, with Germany hotly tipped to lead the recovery.

There will be two important aspects to the data releases due out in the United States this week. On the one hand, May manufacturing sector surveys, namely the Philadelphia Fed and the Markit PMI, could send some encouraging signals on the recovery of activity in the sector, with the gradual reopening of many business sectors in states that account for around 70% of GDP.

New jobless claims in the second week of April should stay on a gradual slowdown path, thanks to reopening in many states. On the other hand, the minutes of the FOMC meeting held at the end of April should shed light on the debate within the Committee on the economic scenario and on surrounding risks, as well as on the commitment to keep acting in support of credit flows and of the recovery expected in the second half of the year.

Data due for release will include April home sales and housing starts, forecast to drop drastically due to the effects of the lockdown on the residential housing sector most states.


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Source: BONDWorld