BofAML: Algunas cosas nunca cambian (Europe Economic Weekly)

Redacción - Lunes, 24 de Agosto

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•   This week, flash PMIs showed signs of improvements with manufacturing activity edging up, especially in Germany.
•   The third Greek program was finally approved. This is certainly good news; however, we think that some challenges are likely
•   We investigate whether strong manufacturing growth is vital for a sustainable recovery in UK.

Weekly view: Summer draws to a close
This was a calm week in terms of data releases for the Euro Area. Flash PMI showed signs of improvements with manufacturing activity edging up, especially in Germany. Meanwhile, the Greek saga returned to the spotlight. Also, as we get closer to the Portuguese elections, some commentators have started to worry about the Portuguese political outlook, but not us.

Euro area: Greece - new program, same problemsThis week, the third Greek program was finally approved. This is certainly good news and should take Greece off the front pages at least for a while. However, we think the latest deal will likely be subject to the same issues that caused the two previous agreements to fail. Some challenges are likely in the short term and almost inevitable over the next three years.

UK: The holy grail of a manufacturing recovery
The need for a UK manufacturing renaissance is often taken as a self-evident truth. We thought it would be worthwhile investigating what manufacturing does and does not tell us, and whether strong manufacturing growth is vital for a sustainable recovery. The results of our truffle hunt for facts do not always support the accepted wisdom.

The week ahead:
Next week, we expect M3 money supply growth in the Euro Area to accelerate 5.1% yoy in July. The final releases for 2Q GDP for Germany and Spain should be unrevised from the initial estimates, at 0.4% qoq and 1.0% qoq respectively.

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