agenda 4

Makroökonomische Daten : 12 – 16 März 2012 (Englisch)

In the euro area, the ZEW index should confirm recovering confidence, thanks to more relaxed market conditions. Broken down data on Italian GDP at the end of 2011 will highlight a drop in domestic demand and exports, as a result of the 0.7% q/q contraction of the economy. Inflation in France is expected to rise to 2.7% y/y on a national basis, and to 2.9% y/y in harmonised terms European inflation should be confirmed at 2.7%. Industrial production is expected to remain weak in January…..     

          The calendar of events is a busy one in the United States this week. The FOMC meeting should leave open the option of a new stimulus package, underlining the fragility of the recovery and the risks to growth. February data should prove positive, with both retail sales and output on the rise. February inflation will be pushed up by commodity prices, but will incorporate only a part of recent oil price increase: the trend will continue in March. Initial manufacturing sector surveys referred to March should point to continued expansion.   

          Monday 12 March
          Euro area

          –  Italy. The  second reading of Q4 GDP  should confirm the preliminary growth rates of -0.7% q/q (with risks skewed to the downside basso) and -0.5% y/y. Broken down data should show that all the main components made a negative contribution in the quarter. Investments are expected to show the sharpest drop. GDP contraction should continue at least throughout the first half of 2012.
          –  Thanks to the high private sector participation in Greece’s debt exchange offer, the Eurogroup will free the 5 Bn tranche of the first Greek adjustment program, and launch the second one by defining its size and conditions.

          Tuesday 13 March
          Euro area

          –  France. In February, consumer prices should be up by 0.8% m/m. Prices should be fuelled by the VAT hike between January and February, by the energy prices trend, which is still making a positive contribution to inflation, albeit at a more moderate pace, also thanks to the exchange rate effect and, lastly, by the waning of the seasonal effect that resulted in inflation coming in lower than expected in the first month of the year (the sales season, clothing prices included). Therefore, in January inflation is expected to accelerate to 2.7% from 2.3% at the national level, and to 2.9% from 2.6% the previous month in harmonised terms. Inflation is expected to have peaked in February; forecasts for the remainder of the year point to a moderation in price growth.  
          –  Spain. The second estimate should confirm Spanish  inflation  at 2.0% y/y, unchanged compared to January, both at the national and harmonised levels. In the month, consumer prices should be up by 0.1% m/m, due to pressures from the energy component. Core inflation is estimated to prove stable at 1.2% y/y.
          –  Italy. The second estimate should confirm Italian  inflation at 3.3% at the national level at 3.4% harmonised. The inflation trend probably  peaked in February. Core inflation should
          prove stable at 3.0%.
          –  Germany. In March the ZEW index should confirm the recovery in confidence seen over the past two months, tied to improving labour market conditions. However, this month we expect the expectations component to improve by only 6 points, to +11.4, after leaping (+27 points) by over half the standard deviation in February. The ZEW and IFO indices remain on levels compatible with a recovery in economic activity in Germany in the opening months of this

          United States

          –  February  retail sales should show sustained growth, up by 1.2% m/m on the back of auto sales and of the price of oil. In February, auto sales hit a four-year high, on the rise by 6.4% m/m; although part of the monthly change may be fleet sales, nominal sales to households should be up by around 2% m/m. The price of  gasoline petrol should rise sharply (+2.5% m/m). Data net of autos and petrol should point  to a sound growth of close to 0.6% m/m. Consumption remains on a positive path, on course for a growth of between 2% and 2.5% in 2012.    
          –  The FOMC meeting should be interlocutory. The post-meeting statement is expected to keep all options open, stressing that, despite stronger-than-expected data, the recovery remains fragile and labour market conditions are far from “normal”. As regards prices, the recent rises in the energy sector will be highlighted as having transitory effects on headline inflation, and cooling growth, bringing down the purchasing power of households. As regards monetary policy strategy, in addition to indicating that rates will remain stable until well into 2014, the FOMC will make it clear that it is ready to use “all available tools” to meet its twofold mandate on full employment and price stability. One of these “tools” could be the adoption of new stimulus without increasing the size of the balance sheet and, therefore, the inflation risks pointed out by some critics, both within and outside the Fed. In the months ahead, the FOMC may consider a new asset purchase programme, sterilising its effects on the monetary base. Purchases would be conducted at the long end of the curve, mostly on MBSs, with the aim of revamping the mortgage market and containing the negative effects of the strong flow of new foreclosures following the agreement signed in February with the banks. The new element would be sterilisation through the issuance of short-term deposit certificates. At the moment, it seems likely that any new stimulus measure would be introduced during a two-day meeting, followed by a press conference. Therefore, next week’s meeting could provide some indication of openness in this direction, but a wait and see attitude will be maintained until April, or more probably June. Even assuming sterilisation, there would be dissent within
          the FOMC for a new stimulus package, but not to the extent of stopping the majority, led by Bernanke.

          – The BoJ meeting is not expected to bring important developments, after the expansion of the asset purchase programme announced in February (+10 trillion yen in JGBs), to 60 trillion from 50 trillion yen. However, the central bank may extend the short-term loans included in the package by one year, from the end of March 2012 to the end of March 2013. The press release will reassert the central bank’s intention  to put act aggressively the explicit inflation
          rate target, set at 1%.  

          Wednesday 14 March
          Euro area

          –  The second estimate should confirm euro area inflation at 2.7% y/y in February. In the month, consumer prices should be up by 0.5% m/m on pressures deriving from energy prices. Core prices are expected to have grown by 0.4% m/m, placing core inflation at 1.6% y/y vs. a previous rate of 1.5% y/y. The energy component will keep inflation above 2% until the summer. On average, in 2012-2013 European  inflation should amount to around 2.2%- 2.3%.
          –  Industrial output is expected to remain unchanged in January, after dropping by 1.2% m/m in December. If confirmed, the reading would result in a quarterly change of -0.9% q/q, as a result of the weak exit from 2011. We do not  rule the possibility of February data showing renewed weakness as a result of exceptionally bad weather conditions throughout Europe.

          United States

          –  Import prices  are forecast to rise by 0.5% m/m, supported by modest commodity price increases. The survey period is the first part of the month, therefore only part of the rise in oil prices should be recorded in February.  
          –  The NY Fed’s Empire  Index should be down slightly in March, to 18 from 19.53 in February, after five consecutive increase. The ISM corrected in February, and the recent rise in the price of oil could weigh negatively on the manufacturing sector. The prices paid and received indices should improve further.  

          Thursday 15 March
          Euro area

          –  Employment in the euro area is expected to have remained broadly stable at the end of 2011, or to have dropped by one-tenth of a point. The job destruction trend may accelerate in the months ahead, as it typically lags the economic activity cycle. We expect employment to drop by 0.3% on average in 2012, with risks skewed to the downside.

          United States

          –  In February the  PPI  is forecast to rise by 0.5% m/m,  after two consecutive months on the decline. Energy and food prices should show strong increases. The core index is expected to grow by 0.2% m/m, with a modest recovery in auto prices, after the January drop.   
          –  The Philadelphia Fed index should be up slightly in March, to 11.5 from 10.5 in February. The survey is lagging the increases shown by other sector surveys, and should close part of the gap vs. the ISM. The correction of the national survey in February indicates a stabilisation in the pace of growth of the manufacturing sector, on which the rise in oil prices will also weigh.   

          Friday 16 March
          United States

          –  The February CPI should increase by 0.5% m/m, driven by energy prices. The price of petrol increased by 6% in the month, and the change will be amplified by seasonal adjustment factors. The moderate trend of electricity and  gas prices will limit only in part the strong contribution made by the energy component to the headline index. The core index should be up by 0.2% m/m, on the back of rising housing prices (with rents at the fore) and a likely rebound in auto prices.     
          –  Industrial production  is estimated to have grown in February by 0.4% m/m. The output component of the February manufacturing sector survey remains high (55.3 for the ISM) signalling that growth is continuing at a sustained pace (manufacturing sector output up by 0.7% m/m in January). Once again in February the contribution of utilities and mining should be negative, due to persistently mild weather conditions.   
          –  Consumer confidence as surveyed by the University of Michigan in March (preliminary index) should be broadly in line with the final February index (75.3) at 75.5. Both the assessment of current conditions and expectations should confirm the recovery in confidence seen in January, compared to H2 2011 levels. The recent rise in petrol prices should prevent further increases, although the recovery of the stock market, and the improvement of labour market conditions, should help. Inflation expectations on a one-year horizon should rise from 3.3% at the end of February, in light of the higher price of petrol.


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