In the euro area there will be attention on industrial production for August after asharp drop in the German figure has created fears of a more severe slowdown inEurope. We expect industrial production in the euro area to have declined 1.1% m/min August driven by the 4.0% m/m drop in Germany. A more resilient euro figureshould underscore that calendar distortions in connection with the summer holidaywas probably the main explanation for the weak German figure. However, we alsoexpect the German ZEW indicator to decline further in October, emphasising thatthe economy continues to lose momentum but not as severely as suggested byindustrial production.
EU finance ministers will convene in connection with the ecofin meeting. EUrecommendations on member states’ fiscal and economic policy will remain the maintopic. The European court of justice will also today start its hearing of the legality ofECB’s OMT programme. There will not be a ruling today, but when the ruling isready it is expected to be scrutinised closely by the German Constitutional Court.
In the UK we expect the increase in consumer prices to have eased further to 1.4%y/y in September from 1.5% y/y in August. This is the lowest level of inflation sinceSeptember 2009 and underscores that downward pressure on inflation at the momentis a global phenomenon driven not least by lower gasoline prices.
In the US the only notable data release is NFIB small business confidence forSeptember and focus will mainly be on Q3 earning reports.
Read the full report: FX Daily