1Finance

EUR/USD certainly felt the decision of the ECB in a week that unleashed some volatility and sent the euro tumbling down. The upcoming week features inflation and GDP data among other events. Here is an outlook for the highlights of this week.

1. German retail sales: Monday, 7:00. The largest economy in the euro-zone saw consumption sliding by 0.2% in August. For the month of September, a rise of 0.5% is expected. Germany’s economy leans more towards industrial exports than internal consumption.
2. Spanish CPI: Monday, 8:00. The fourth-largest economy has seen inflation stabilizing in recent months after reaching 3% beforehand. In September, the annual level of inflation reached 1.8%. We now get the preliminary figures for October. A small slide to 1.7% y/y is on the cards.
3. Spanish GDP: Monday, 8:00. Spain has been a success story in the past three years, growing above the euro-zone average. In Q2, the economy advanced by 0.9%. Q3 will likely see a similar rate, but uncertainty looms due to the ongoing Catalan crisis. A growth rate of 0.8% is projected.
4. German CPI: Monday, during the morning for the various German states and the all-German figure, is published at 13:00. Prices rose by 0.1% m/m in September, exactly as expected. Germany is the largest economy in Europe and changes in its GDP impact the all-European number more than any other country. A similar figure is expected now.
5. French GDP: Tuesday, 6:30. The second-largest economy in the euro-zone enjoyed an upbeat growth rate of 0.5%, albeit beneath the euro-zone average in Q2. The figure for Q3 will be the first full quarter with Macron in power. A gain of 0.5% is estimated now, a repeat of the previous quarter.
6. French CPI: Tuesday, 7:45. Contrary to Germany, France saw a drop of 0.1% m/m in prices back in September. The publication from France provides a last-minute hint towards the all-European CPI. This time, a slide of 0.1% is forecast. The consumer spending measure is published at the same time but the CPI carries more weight.
7. CPI: Tuesday, 10:00. While the ECB decision is already behind us, the fresh flash CPI estimate has a significant impact on future moves. Headline CPI stood at 1.5% in September, which is not satisfactory to meet the ECB’s “2% or a bit below” inflation target. Core CPI slipped to 1.1%, falling short of predictions. The exact same numbers are projected now.
8. GDP: Tuesday, 10:00. After all the major countries published their estimates, we get the all-European measure. Current expectations may change according to the earlier publications. The euro-zone economies grew by 0.6% in Q2, continuing the streak of upbeat publications. A slightly more modest growth rate of 0.5% is expected.
9. EU Economic Forecasts: Tuesday, 10:00. The European Commission releases its updated economic forecasts three times a year. After a few upbeat publications, it will be interesting to see if the crisis in Catalonia will have any impact on the projections. Some forecasters have revised down Spain’s growth prospects, but we haven’t seen the crisis being accounted for at the euro area level.
10. Unemployment Rate: Tuesday, 9:00. This busy time of the day also consists of the unemployment rate. After peaking above 12%, the jobless rate fell gradually and stands at 9.1% as of August. We now get the belated numbers for September. Another improvement is predicted: 9% this time.
11. Manufacturing PMIs: Thursday morning: 8:15 for Spain, 8:45 for Italy, final French figure at 8:50, final German number at 8:55 and the final euro-zone release at 9:00. Markit’s manufacturing PMI for Spain stood at 54.3 points in September, above the 50 point threshold separating expansion from contraction. A small rise to 54.9 is forecast. Italy, the third-largest economy, had a score of 56.3 points. A small rise to 56.7 is projected. The initial read for France for October showed an upbeat level of 56.7. Germany’s reached 60.5 and the whole euro-zone was 58.6. The preliminary figures for October will likely be confirmed now.
12. German Unemployment Change: Thursday, 8:55. Germany has seen unemployment dropping quite consistently in past years. The fall in July was quite impressive: 23,000. Another drop is likely for the month of August: 10K this time.

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