agenda 4

Makroökonomische Daten – 14-17 März 2011 (Englisch)

In the Euro area, the ZEW index (the first confidence survey for March) might be little changed with regard to expectations and show a further improvement in the view of the present situation, confirming the generally robust health ...   

          of the German economy. Euro area industrial production might be little changed in January. The first CPI estimate in France and the second reading of the inflation data in Italy and the Euro area should confirm price increases  driven mainly by energy.

          The coming week is packed with data and events in the United States. The regional March manufacturing surveys should again signal robust expansion in activity. Industrial production is expected to show robust growth in February. All the price indices will show a vigorous dynamic in the headline aggregates, and a moderate dynamic in the core aggregates. February new starts and building permits should confirm the stagnation of residential building activity, stuck at 2H10 levels. The FOMC meeting is not expected to signal any imminent developments on the monetary policy strategy.


          Monday 14 March
          Euro area

          – Industrial production in the Euro area might be up a meagre 0.2% mom in January (after 0.3% mom in December). Year-on-year growth adjusted for working days, despite slowing on the previous month, would remain robust (we estimate 6.7% vs. 8.8% yoy). The level of output would thus be around 10% below the pre-crisis highs but 15% above the low recorded in April 2009. In January, output barely grew in Germany (0.1% mom, ex construction), slumped in Italy (-1.5% mom), and bounced in France (+1.8% mom). Looking ahead, after broadly stagnating around year-end, Euro area output might accelerate again in the coming months.
          – Meeting of the Eurogroup, followed on Tuesday 15 by the Ecofin meeting, to discuss the legislative proposals to reinforce economic governance, and specifically: preventive and corrective arms to the Stability and Growth Pact, enforcement of budgetary surveillance in the Euro area, prevention, correction and strengthening of corrective measures to the macroeconomic imbalances and requirements for budgetary frameworks for member states.


          Tuesday 15 March
          Euro area

          – France. Consumer prices are expected to be up 0.5% mom in February after falling by 0.2% mom in January; year-on-year inflation might slow one-tenth to 1.7% on the national measure and remain steady at 1.9% on the harmonised index. A substantial contribution to month-on-month prices growth should come from energy in the wake of the fuel price hikes (avg. 2.5% in the month). Apparel and footwear prices should rebound after the January fall (-7.9% mom) due to the end-of-season clearance sales. Inflation will likely remain at the current levels for much of the year.
          – Germany. The ZEW index of expectations regarding the German economy among analysts and institutional investors might retrace to 15.4 from 15.7. The index, which still signals an improvement six months forward, should continue to flag up the robust health of the German economy. The present situation indicator should rise further to 87 from 85.2, just shy of the all-time high recorded in June 2007.

          United States
          – The NY Fed Empire index is expected to rise to 22 in March from 15.4 in February. The relationship between the Empire and the ISM, and that with the Philly Fed, would suggest growth in the Empire to 30, closing the gap that has continued to widen in recent months.
          The breakdown of the February survey was much poorer than the findings of the other surveys, showing a correction in new orders in stark contrast to the indications of the ISM and the Philly Fed. Both the input and output price indices should continue rising.
          – Import prices should be up 0.8% mom in February after + 1.5% mom in January. The oil price will contribute positively to the index, though less so than in January (+3.4% mom). Prices ex oil will remain on a robust growth path close to the average for the last three months (0.7% mom avg., +1.1% mom in January). Prices are affected by tensions on the commodity markets as well as by a weakening USD exchange rate.
          – The index of homebuilder confidence as measured by the NAHB should rise to 17 in March from 16 in the last four months. The February survey noted an improvement in the expectations sub-indices. The weather might help, after three months of exceptionally rigid conditions.
          – The FOMC meeting should end with few changes. The statement is expected to note the improvement in growth and particularly in the employment dynamic. However, stress will gain be laid on the fact that the pace of payrolls growth is insufficient to return the unemployment rate to normal any time soon. In its price indications, the statement should confirm what Bernanke said: the recent spikes in commodity prices should have only a modest and shortlived effect on inflation. The FOMC will reiterate its commitment to constantly review the purchases programme in relation to the economic prospects, although there should be no indication of changes to the programme. Since January the statement has no longer given explicit indications on the pace of monthly purchases, as was done in November and December (around USD 105Bn per month): discussions on this point are probably ongoing, as may be inferred from the broad range of views expressed recently. No clear consensus position has emerged as yet, not even on the case for staggering the purchases in recent months, as was done with the QE1 programme. More information should be forthcoming between March and May.


          Wednesday 16 March
          Euro area
          – Italy. The second estimate of consumer prices in February should confirm growth of 0.3% mom (vs.0.4% mom in January) and the acceleration in year-on-year inflation to 2.4% from 2.1% yoy. On the harmonised measure prices should be confirmed up 0.2% from -1.6% mom before, and, yearon-year, price growth to 2.1% from 1.9% yoy. We estimate a full-year average on the national measure of 2.2%, but in Italy too the risks to the inflation forecasts inevitably lie to the upside at this time.
          – The second estimate of consumer prices in the Euro area in February should confirm the first estimate of a 2.4%, vs. 2.3% yoy in January. The figure is consistent with month-on-month growth of 0.4% mom (vs. -0.7% mom in January). Core inflation should remain low (our estimate: 1.2% yoy). It is now virtually certain that Euro area inflation will remain above 2% for almost the whole year.

          United States

          – New starts are expected to fall to 580k in February from 596k in January. The expected fall is partly due to the weather and partly to the volatility of the multi-family units sector. In January, new starts in this segment grew by 77.7% mom, which should be followed by a correction. In addition, a gap has opened up between starts and permits which should also close, confirming the levels seen in permits, i.e. close to 560k units, in the middle of the narrow range seen since mid-2010. Permits should stabilise at 565k, close to the January levels (563k) which were down sharply on December.
          – The PPI should be up 0.7% mom in February, while the core index should be up 0.2% mom, after +0.5% mom in January. Petrol should make a moderate contribution to the increase in prices in February, while food and natural gas prices should surge. The trend in core intermediate goods prices is buoyant (+1% mom in January, +0.7% mom avg. in the last three months) and signals there are also pressures on the less volatile components.


          Thursday 17 March

          United States
          – The CPI is expected to be up 0.5% mom in February, after +0.4% mom in January. The core index should be up 0.1% mom (1.1% yoy from 1% yoy in January). Food and energy prices should show large gains, with some of the spike in commodity prices feeding through to final prices. With regard to the core component, housing ex-energy should confirm the modest uptrend of +0.1% mom, as has been the case for several months now; apparel and education should correct after the January increases (+1% mom for apparel, +0.6% mom for education), while healthcare should accelerate slightly towards trend by at least 0.2% mom, after +0.1% mom in January.
          – Industrial production should be up 0.7% mom in February after shrinking by -0.1% mom in January, probably due in part to the bad weather. All sectors should report healthy gains. Hours worked as recorded by the employment report were up, notably in manufacturing. Manufacturing output should continue on the uptrend seen in previous months, as signalled by the strong sector survey figures across all areas in both the composite and production indices. The auto sector will again make a positive contribution to the overall dynamic. Utilities and mining output should also be up. Capacity utilisation should rise to 76.6%.
          – The Philadelphia Fed index should retrace slightly to 32 in March after surging to 35.9 in February (series high since January 2004). There might also be corrections in the individual components, though without altering the general picture. The breakdown of the February survey was very positive: new orders stabilised at 23.7 in February, at the January levels and at their highest since 2004; deliveries expanded b y 11.8 points to 35.2; backlog orders and delivery times were also up, as were payrolls. The March indications should again point to very solid expansion in the sector. The price component should continue to rise (21 in February, -9.8 in October 2010). Expectations six months forward might correct from 40.1 in February.


          Appendix
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