The weekly view: A bit of breathing space? PMIs surprises indicate that Euro area and Germany weakness should be temporary. However, we remain cautious given the disconnection between GDP and PMI and the current deflation risks.
Euro area: Waiting for inflation to pick up
We are one step closer to the ECB recognising that the risks of a prolonged lowflation are much higher than previously thought and acknowledging that deflationary risks are not negligible. The next six months will be crucial.
UK: BoE still unanimously on hold
The BoE voted unanimously to leave interest rates on hold in July, with the accompanying debate somewhat more dovish than expected.
Peripheral watch: Strong employment numbers in Spain
The labour force survey improved substantially in Q2, a reflection of the strong cyclical momentum of the Spanish economy. But it also showed that some structural issues remain unresolved, which could limit the sustainability of the recovery
The week ahead:
Next week, we expect Euro area inflation to ease from 0.5%yoy in June to 0.4% in July while core inflation should remain stable at 0.8%yoy.
Next week, we expect Euro area inflation to ease from 0.5%yoy in June to 0.4% in July while core inflation should remain stable at 0.8%yoy.
Date |
GMT |
Country |
Data/Event |
For |
BofAML |
Cons.† |
Previous |
|
|||
29-Jul |
09:30 |
UK |
Money Supply M4 (mom) |
Jun |
-- |
-- |
-0.1% |
|
|||
29-Jul |
09:30 |
UK |
M4 Money Supply (yoy) |
Jun |
-- |
-- |
-0.9% |
|
|||
30-Jul |
10:00 |
Euro area |
Economic Confidence |
Jul |
103.0 |
-- |
102.0 |
|
|||
30-Jul |
10:00 |
Euro area |
Industrial Confidence |
Jul |
-4.3 |
-- |
-4.3 |
|
|||
30-Jul |
10:00 |
Euro area |
Services Confidence |
Jul |
4.5 |
-- |
4.2 |
|
|||
30-Jul |
10:00 |
Euro area |
Business climate indicator |
Jul |
0.25 |
-- |
0.22 |
|
|||
31-Jul |
10:00 |
Euro area |
Unemployment rate |
Jun |
11.4% |
-- |
11.6% |
|
|||
31-Jul |
10:00 |
Euro area |
CPI Estimate (yoy) |
Jul |
0.4% |
-- |
0.5% |
|
|||
31-Jul |
10:00 |
Euro area |
CPI Core (yoy, A) |
Jul |
0.8% |
-- |
0.8% |
|
|||
01-Aug |
09:00 |
Euro area |
Manufacturing PMI (F) |
Jul |
51.9 |
-- |
51.9 |
|
|||
01-Aug |
09:30 |
UK |
Manufacturing PMI SA |
Jul |
57.0 |
-- |
57.5 |
|
|||
Source: BofA Merrill Lynch Global Research, Bloomberg, Reuters, Central banks |
|
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Table 1: Ratings calendar |
|||||||||||
Country |
Agency |
Stance |
Expectation |
||||||||
Greece |
Moody's |
Stable |
No change |
||||||||
Source: Bloomberg, BofA Merrill Lynch Global Research
Please see full report for further details...