5 November 2001, 09:10 OUTLOOK Euro zone data this week to provide further evidence for ECB rate cut
LONDON (AFX) - Euro zone figures this week are expected to provide
further evidence of a sharp slowdown in the economy, raising the
likelihood of a rate cut from the European Central Bank, economists
said.
The ECB meets on Thursday and will be under enormous pressure to
cut rates, following the muted response to its decision to hold rates
at 3.75 pct at the last meeting.
As well as the ECB, the Federal Reserve, the Bank of England and
the Swiss National Bank, meet next week to decide their latest rate
decisions and all are expected to cut once more.
The ECB argued after the last meeting that it needed more
information about the impact of Sept 11 on the euro zone economy before
advocating a rate cut. Next week's data should provide this
information, economists said.
In particular, they will be eyeing the slew of euro zone data.
Monday's CPI data is expected to show evidence of decreasing price
pressure, with economists projecting a 0.1 pct fall, according to the
AFX consensus of forecasts.
Others like the services PMI will reflect the fully the impact on
business sentiment of the Sept 11 terrorist attacks.
"A large drop in the new business index combined with a sharp
deterioration of business expectations in September point to a sizeable
fall in the services PMI in October, probably the largest since the
series began in July 1998," said Schroder Salomon Smith Barney
economist Michael Saunders.
Unemployment and consumer confidence figures are also expected to
highlight the worsening economic trend.
Germany, the euro zone's largest economy, is expected to show
further signs of a struggling economy.
Unemployment is expected to rise at a somewhat faster pace than in
earlier months in October, reflecting the retrenchment since Sept 11.
"Activity has slowed abruptly this year, adversely affecting labour
demand, although numerically the increase in the number of out of work
has come almost wholly from people exiting training and employment
promotion schemes," said Royal Bank of Scotland European economist
Nigel Anderson.
"The risk is that as the economy weakens further in the near-term,
lay-offs mount and unemployment accelerates," he added.
Other figures of interest include French consumer confidence
numbers, which are expected to be the lowest since the beginning of
1998.
Economists' forecasts for euro zone indicators due Nov 2-9
AFX CONSENSUS PREVIOUS
MONDAY NOV 5
Euro zone Oct CPI
month-on-month (pct) -0.1 +0.3
year-on-year (pct) +2.4 +2.5
TUESDAY NOV 6
France Oct consumer confidence -18 -15
German Oct unemployment
month-on-month (pct) 9.4 9.4
monthly change (000) +19 +20
Euro zone Oct services PMI 47 49
Euro zone Sept unemployment
month-on-month (pct) 8.4 8.3
Euro zone Oct business confidence -17 -16
Euro zone Oct consumer confidence -11 -12
Euro zone Sept PPI
month-on-month (pct) +0.1 -0.1
year-on-year (pct) +0.7 +1.9
WEDNESDAY NOV 7
German Sept factory orders
month-on-month (pct) -2.2 +1.2
year-on-year (pct) -3.4 -4.7
Euro zone Oct business climate index -0.635 -0.57
Euro zone Aug retail sales
year-on-year (pct) +1.9 +1.6
THURSDAY NOV 8
German Sept industrial production
month-on-month (pct) -1.5 -2.2
year-on-year (pct) -2.1 -1.0
© 1999-2024 Forex EuroClub
All rights reserved