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Intesa Sanpaolo : Prospects for the global economy

Intesa Sanpaolo : The prospects for the global economy continue to be conditioned by the pandemic, which will once again be a problem in coming months.

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Weekly Economic Monitor – 25. September  2020 Intesa Sanpaolo – Research Department


From the autumn in fact the risks linked to the overlap of COVID and seasonal flu will definitely prevail.

Also in the more comforting central scenario, we expect a slowdown in growth in the 4th quarter. With or without a mass vaccine, we expect a recovery towards normality as from the end of spring 2021.

The week’s market movers

In the Eurozone , the composite EU Commission index should confirm the further recovery of confidence indices in September, driven by the industrial sector, as opposed to a slower recovery in services. Inflation should decrease further in September (to -0.3% in the Eurozone), and stay in negative territory for several months.

Unemployment is forecast stable in Germany, and on the rise in Italy and in Eurozone as a whole. Also in Italy, at the beginning of the week the government should approve the Economic and Financial Document Update Note, containing initial rough indications on the 2021 fiscal measures and on the use of Recovery Fund.

Next week, a host of important data releases are lined up in the United States . Focus will be on the September Employment Report, that should send further positive signals, with non-farm payrolls growth just short of 1 million, and a modest drop of the unemployment rate.

The manufacturing ISM, consumer confidence, personal income and personal spending, should all improve again in September. Also in September, the consumption deflators, both overall and net of food and energy, are expected to post a solid increase, by 0.3% m/m.


Appendix
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