Spanish and German inflation will provide information about the impact of thedecline in the oil price during October. In line with our above-consensus forecast foreuro-area inflation, we forecast both the German and Spanish figures to increase0.3pp in October despite the significant oil price decline.
We expect Spanish GDP to grow 0.5% q/q down from 0.6% q/q in Q2. Including ourforecast for Q4 this should imply a growth rate of 1.3% in 2014, which will be thehighest since 2007.
German unemployment is expected to stay low at 6.7% but the latest weakness inactivity carries a risk of an increase in the unemployment rate.
In the US we will get the first release of Q3 GDP. After strong Q2 GDP data (4.6%y/y), the expectation for Q3 is a slight decline to 3.0%. We expect some moderation inUS growth but lower gasoline prices should make sure the economy stays on apositive path, albeit at a slightly slower pace.
US PCE is also released and our model predicts 0.1% m/m for core PCE, meaning theyearly change continues to be 1.5%. Last week core CPI rose less than expected,which might contribute to a downside risk to the PCE.
Danish unemployment and manufacturing confidence are due for release.
Read the full report: FX Daily