Focus will be on European and Asian data with the US closed for Labour Day.
In Germany the second release of GDP growth together with first estimates of itscomponents is due. The economic contraction of 0.2% q/q in Q2 should beconfirmed but we expect private consumption to have increased. The slowdown wasdue to weak production as a result of the strong currency, weakness in the US andChina in Q1 and uncertainty about the Ukraine crisis at the end of the quarter.
Euro-area manufacturing PMIs are due for release and focus will be on the firstestimate of the Spanish and Italian figures. Based on the flash PMIs for the euro areawe expect the periphery PMIs to decline in August. The Spanish PMI has trendedupwards during 2014 consistent with higher economic activity, while the Italian PMIhas weakened recently but remains stronger than the latest GDP figures.
The rest of the week will be very interesting. We expect no rate cut or QE from theECB but all options should be left open in a very dovish statement. In the US weexpect the labour market to show strong gains in employment in August. Bank ofJapan should acknowledge increasing downside risk from the consumption tax hikebut new easing measures are unlikely until late October. In Sweden Riksbanken isexpected to remain on hold and keep its repo-rate forecast broadly unchanged.
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