agenda 4

Makroökonomische Daten : 19- 23 Dezember 2011 (Englisch)

Due out in the Euro area are the remaining December confidence surveys. All the main indices (German IFO, NBB survey, consumer confidence in Italy and the entire eurozone) may show a fall after some unexpected improvements the previous month (not marking the start of trend in our view, merely a temporary bounce)…….    


          The first Italy GDP estimate will show economic stagnation in 3Q11 (the risk of a sizeable contraction is postponed to year-end 2011/start-2012).

          The coming week is packed with data in the United States. November home sales and new starts should be little changed, though improving slightly; durable goods orders should pick up, and personal spending and income should show modest gains. The final estimate of 3Q11 GDP should remain at +2% qoq ann.

          Tuesday 20 December

          Euro area

          Germany. We expect the IFO to fall again in December (estimated 106.4) after the unexpected bounce to 106.6 in November. The index would still be above the long-term mean (100.6). The present situation index is estimated at 115.5 vs. 116.7 before (long-term mean: 123.3). Expectations three-six months fwd might be little changed (97.5 from 97.3). The IFO remains consistent with expansion of the German economy, although this too should slow between 4Q11 and 1Q12 from the 0.5% qoq posted in 3Q11.

          United States

          New starts are expected to rise slightly to 635k in November from 628k in October. The data from the construction sector has shown tentative improvements in recent months; November should show a rebound in the single-family segment, vs. a correction in multi-family homes. Permits should correct to 635k from 644k in October, falling back into line with starts.

          Wednesday 21 December

          Euro area

          Italy. Publication of the first reading of 3Q11 GDP. The lag vs. the other European countries is due to the fact that the figure will for the first time contain, as per EU rules, the estimates obtained from the new economic activity classification (Nace Rev.2); Istat will revise the historical series as of 2000, which will also incorporate changes due to improvements in the sources and methods used. We expect economic activity to be stagnant in the quarter, since, based on the production data, industry should have made a zero (or slightly negative) contribution to value added, and this is unlikely to be offset by services. In any case, the risk of a sharp contraction in GDP is merely postponed to 4Q11 and 1Q12.

          In Belgium economic confidence is expected to fall to -13 from -12.2. The breakdown of the manufacturing survey will be of interest, notably the trend in export orders, seen as a leading indicator of trends in German industry and thus the Euro area as a whole. The contagion of the financial crisis to countries like Belgium (spread over 230bps) might cause a slowdown in lending flows to businesses.

          Consumer confidence is expected to fall to -21.7 in December from -21.4 before, dented by the ongoing flow of bad news on the macro outlook. The persistence of the crisis and related uncertainty might prompt households to defer spending plans, notably for durables.

          United States

          Existing home sales are expected to rise to 5.1M units ann. in November from 4.97M in October. Pending home sales rose sharply in October (+10.4% mom), making good the summer corrections. Mortgage demand for home purchases also improved in the first half of November, confirming a recovery after the negative trend seen from April to July.

          Thursday 22 December

          Euro Area

          Italy’s Senate is expected to pass by a large majority the confidence motion enacting the latest fiscal correction package. The lower Chamber voted on December 16th.

          United States

          The third estimate of 3Q11 GDP should be unchanged at 2% qoq ann., with a possible small upward revision in consumption to 2.4% qoq ann., offset by slightly more subdued growth in business fixed investments.

          Household confidence as measured by the Univ. of Michigan in December (final) is estimated at 68, in line with the preliminary indications. The equity market has corrected in recent weeks, but the indications from the job market and the price of petrol should buoy the recent improvement in household sentiment.

          Friday 23 December

          Euro area

          France. The second reading of 3Q11 GDP should confirm the preliminary estimate of 0.4% qoq and 1.6% yoy. The quarter recorded acceptable levels of growth (0.3% qoq) in both household consumption and business investments. However, France too risks economic stagnation in 4Q11/1Q12.

          Italy. We expect consumer confidence to fall back to 93.5 in December after the unexpected bounce to 96.5 in November. Household sentiment is not far off the all-time low recorded in July 2008 (92.8), likely dogged by expectations over the impact of the austerity package on disposable income, as well as inflation, plus a possible deterioration in employment prospects. We expect consumption to contract by close to 1% in 2012.

          United States

          Durable goods orders are expected to be up 1.8% mom in November after two straight falls (-0.5% mom in October). Transportation should show a robust bounce after two negative months. Ex transportation, orders should slow to +0.4% mom, after the strong October figure (+1.1% mom, revised from +0.7% mom). The orders component of the ISM was positive in November (rising to 56.7 from 52.4), after several months of quasi-stagnation around 50. The orders trend is positive but there is no sign for now of a fresh acceleration.

          Personal spending should be up 0.3% mom in November, vs. +0.1% mom in October. Consumption should show a positive dynamic in goods (auto, and also non-durables) to the detriment of services, which should again be little changed. Personal income is expected to be up +0.2% mom in November. Wages should be unchanged in light of the weak figures on hours worked and pay in the employment report. The saving rate should fall to 3.4%.

          New home sales should rise to 315k in November vs. 307k in October. The NAHB confidence survey for November showed a marked improvement after months of stagnation, with positive indications for current and future sales. The sales trend remains virtually flat but the signs point to a small improvement.


          Appendix
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