Spanish and German inflation data for August are released ahead of the euro figureon Friday. We expect a new-cycle low in Spanish inflation, which could fuelexpectations of further ECB easing after Draghi’s dovish speech at Jackson Hole. The German figure,released in the afternoon, is expected to be unchanged at 0.8% y/y. Although weexpect the euro aggregate to decline further to 0.3% y/y, we do not think it is enoughfor the ECB to ease in September.
Euro-area bank lending figures will also be interesting, as they determine thepotential boost to liquidity from the second round of the ECB’s TLTROs starting in2015, see ECB easing – will it work? #1: ECB’s easing measures revisited, 25 August.The lending figures are also important as the better development seen recently willreduce the headwind to GDP growth in H2. We expect further small improvements inlending to non-financial corporations, while money supply should continue to grow1.5% y/y.
ECB’s Likanen speaks. Due to intensified focus on the ECB and as he is the onlyECB member scheduled to speak this week, his comments will be followed closely.
In the US focus is on the job market with the release of initial jobless claims. Lastweek claims were better than consensus expectations and the four-week average wasat 300k, which is still a very low level pointing to a robust labour market in the US.
US pending home sales are expected to move sideways, while we expect a minorcorrection in the second release of GDP growth for Q2 to around 3.9% q/q AR.
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