agenda 4

Makroökonomische Daten – 11 – 15 April 2011 (Englisch)

In the Euro area, industrial production is expected to be up 0.5% mom in France, up 0.9% mom in Italy and up 0.8% mom in the Euro area as a whole. The recovery in industry should continue through 2Q11.  ..      

          Indications to this effect should come from the ZEW index which is expected to be down slightly in April, though still at levels consistent with economic expansion in Germany and, to a lesser extent, in the Euro area. French inflation is estimated at 1.8% yoy in March vs. 1.7% yoy in February.

          The coming week is packed with data in the United States. The price data for March will confirm the intense upward pressures on the headline CPI, PPI and import prices due to the commodity price hikes; but the core indices too will continue to reflect the more robust dynamic seen since the start of the year. March retail sales will be partly magnified by the price effect, while industrial production should be up. The Empire survey might be affected by the earthquake in Japan, while household confidence should pick up after the March fall.

          Monday 11 April

          Euro area

          France. Industrial production is expected to be up 0.5% mom in February vs. 1.0% mom before, giving a year-on-year movement slowing to 5.2% from 5.4% yoy. The level of output would thus be just 8% below the pre-crisis highs. Even in the event of no change in output in March, production would be on track for an acceleration to 2.2% qoq in first quarter 2011 from 0.9% qoq in 4Q10. The PMI and INSEE confidence surveys point to ongoing growth in output in France.

          Italy. Industrial production should be up 0.9% mom in February after the consensus-beating contraction of 1.5% mom recorded in January. The year-on-year movement, calculated on the calendar adjusted series, should accelerate to 2.4% from 0.6% yoy. The confidence surveys point to a recovery in output in Italy, which for now is weaker than the other major Euro area economies. According to our forecasts, GDP growth in Italy might disappoint again in 1Q11 (we estimate +0.2% qoq vs. 0.1% qoq in 4Q10), before picking up in the second quarter.

          Tuesday 12 April

          Euro area

          Germany. The ZEW index of analyst and institutional investor expectations for the German economy might slip to 13.0 from 14.1. Sentiment among the respondents might be impacted by the recent signs of global uncertainty (“geopolitical” crisis in North Africa, the consequences of the earthquake in Japan and sovereign debt risks); however, the indicator should remain above zero, signalling that most respondents expect the current outstanding performance of the German economy to expand further over the next six months. The present situation index might rise further to 85.6 from 85.4, just short of the all-time high recorded in July 2007.

          United States

          Import prices are expected to accelerate further in March, rising by 2% mom, after +1.4% mom in February. The growth in commodity prices will again be the main factor behind the month-on-month movement, but dollar depreciation contributes to the pressures. The movement in the oil price should accelerate vs. +3.7% mom in February, while core prices too should continue to show a relatively robust dynamic (0.45% mom avg. in the first two months of the year), with the contribution of the weak dollar and growth in demand.

          The trade deficit is expected to narrow to USD 43.5Bn in February, after widening to USD 46Bn in January. In January the sharp rise in imports drove the deficit to levels not seen since August 2010; some of the growth in imports was due to the oil price (this component will continue into February), but the growth in volumes ex-oil should slow, as signalled by inventories in February. Exports should continue to grow. The foreign channel should make a negative contribution to growth in 1Q11, offset by inventory accumulation.

          Wednesday 13 April

          Euro area

          France. Consumer prices are expected to be up 0.6% in March (from 0.5% mom before) on the national measure and up 0.7% mom on the harmonised measure (from 0.5% mom).

          Inflation should accelerate by one-tenth to 1.8% yoy on the national measure and by twotenths to 2.0 yoy on the harmonised index. The growth in prices is again likely to be due to the increases in energy and food prices (+2.9% and +1.3% mom respectively in our estimates). Core inflation might accelerate slightly, whilst retaining historically modest growth rates (our estimate: 0.8% vs. 0.7% yoy before). Inflation should stabilise at the current levels over the months ahead.

          Industrial production in the Euro area should be up 0.8% mom in February and the figure for the previous month was nudged down to 0.2% mom. Year-on-year, output would accelerate to 7.7% from 5.9% yoy. According to the figures already released, output grew in Germany (+1.4% mom ex construction), the Netherlands (+1.2% mom) and Spain (+0.2% mom). If confirmed, the figure would leave the quarterly dynamic on track for growth of 1.1% qoq vs. 1.3% qoq before. The economic data signal ongoing resilience in industrial production through the spring months.

          United States

          Retail sales should be up 0.5% mom in March, after +1% mom in February. Sales ex-auto are expected to be up 0.6% mom. Petrol sales will be magnified by the price increases (petrol price up +7% mom between end-February and end-March). Food sales should also be up. Auto sales fell 2.3% mom in March, but the contraction should be smaller in retail sales, following the strong gains recorded in previous months. The weekly sales figures were positive.

          The Fed publishes the Beige Book ahead of the FOMC meeting on 26-27 April. The report might give some details on the potential effects of the Japanese earthquake on industrial production and on the bottlenecks in manufacturing due to the lack of parts. The Fed will certainly monitor the data on prices and pay in light of the inflation fears voiced by some on the FOMC.

          Thursday 14 April

          United States

          The PPI is expected to be up 1.2% mom in March, after +1.6% mom in February. The core PPI should be up 0.2% mom, as in February. Energy and food will account for most of the expected increase, with the oil price up 7.5% in the month. Energy should accelerate vs. the 3.3% mom seen in February, while food should return to the growth rate seen late 2010-early 2011 (0.6% mom), slowing from +3.9% mom in February. Core intermediate prices have accelerated since the start of the year (+1.1% mom avg.), and confirm the feed-through of some of the commodity price pressures down the production chain.

          Friday 15 April

          United States

          The CPI is expected to be up 0.5% mom in March, as in February. There are risks to the upside on this forecast. The core measure should be up 0.2% mom for the third straight month. Energy should be up 6% mom, driven by petrol. The core index should continue the uptrend of 0.1% mom seen in the last six months. Notional rents have been growing by 0.1% mom for six months; there are upside risks to rents, also up 0.1% mom in recent months (5.925% weight within total index): the figures on market rents are signalling a marked acceleration in this sector. Autos should continue to contribute positively to the core index, and apparel should show a more normal dynamic after falling by -0.9% mom in February and rising by 1% mom in January. The price trend should therefore remain gradually upward for core inflation.

          The NY Fed Empire survey should fall to 16 in April from 17.5 in March. The breakdown of the March survey was weak, showing a fall in orders and deliveries and the April data might reflect the effects of the Japanese earthquake on inventories, activity and orders. These effects should however be short-lived, although they could obscure the picture for several months.

          Industrial production is expected to be up 0.4% mom in March, vs. zero movement in February. Manufacturing output should remain on a positive path, but the automotive and parts sector (4% of total industrial production) might slow after two months of gains (4.3% mom avg.), partly on account of the earthquake in Japan; in March firms used inventories to counter the halt to production in the areas affected and they reduced or eliminated overtime.

          April will show more substantial effects: Toyota, for example, has said it will close its factories in the USA owing to a lack of parts, leaving 25k employees temporarily laid off. Utilities should rebound after two sharp corrections in January and February (-2% and -4.5% mom respectively); mining should also see growth in output. Industrial production might be impacted by the effects of the earthquake in Japan in 2Q11.

          Household confidence as measured by the Univ. of Michigan in April (preliminary) should show a small recovery to 70 after collapsing to 67.5 in March (from 77.5 in February). Inflation expectations will be very important; in past months they signalled large rises and have a growing weight, at least as far as the Fed’s rhetoric is concerned: in March expectations one year forward rose to 4.6% (highest since August 2008), while expectations five years forward rose to 3.2% (highest since August 2008).


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