EMU economic indicators

Output in the German producing sector will probably have suffered a setback in February

Mon, Apr 7 2008, 12:06 GMT
by BHF-Bank Economics Department

BHF-Bank


  • ECB set to keep refi rate unchanged, likely to emphasize inflation risks

Output in the German producing sector probably suffered a setback in February, after having soared twice and although most of the correlated indicators improved. For similar reasons, Italian industrial production might have decreased in February, whereas French industrial production could have remained unchanged. The February German trade balance is expected to have decreased slightly in February, whereas the current account could have remained more or less stable. Q4 EMU GDP data are unlikely to have been revised significantly.

The ECB Council is meeting on Thursday to discuss monetary policy. We expect it to keep rates on hold in April. In view of the recent acceleration of inflation, the council is likely to repeat warnings about inflation risks from second-round effects. However, given that financial markets are under considerable strain and that euro area growth seems to slowing down, the central bank is unlikely to rule out any policy option. Moreover, the ECB will probably criticise exchange rate developments as excessively volatile.

Published on  Mon, Apr 7 2008, 13:27 GMT

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