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EMU economic indicators

7

1

German ifo business climate (June): improvement

Mon, Jun 22 2009, 08:05 GMT
by BHF-Bank Economics Department

BHF-Bank


  • PMI manufacturing indices Germany and EMU (June): up

  • German CPI inflation (June): Slightly positive

The preliminary results for national German CPI for June are due to be released on Friday at the latest. We expect German consumer prices to have gone up by 0.3 % month-on-month; the annual rate would then increase slightly to 0.1 %. The monthly inflation will have been mainly due to significant price increases for gasoline and heating oil. These products are likely to have pushed inflation up by about 0.3 percentage points. Increasing gas prices and decreasing electricity prices could have more or less cancelled each other out. Prices for package tours and accommodation services could have had a slightly positive impact on monthly inflation. On the other hand, clothing is likely to have had a dampening effect and food prices could have fallen further. As from July, year-on-year inflation is expected to fall into negative territory for some months.

In June, the ifo business climate for Germany might have risen more sharply than the previous month. The German ZEW economic sentiment and the US ISM manufacturing index have both improved. German yield spreads have widened somewhat, as short-term interest rates had been stabilising and long-term rates had been going up until recently. The DAX has recovered too on the whole. On the other hand, the euro has appreciated and crude oil prices had been increasing until recently.

Ifo Business Climate

For similar reasons, most of the other economic climate indicators in the EMU – Belgian, French and Italian business confidence as well as French and Italian consumer confidence – are likely to have improved in June. The German GfK consumer confidence for July could have remained unchanged.

French consumer spending probably went up slightly in May, as consumer confidence improved. EMU industrial new orders might have remained more or less unchanged in April, just like the corresponding German figure. Following its usual seasonal pattern, the EMU current account is likely to have deteriorated in April. French Q1 GDP might be revised downwards.


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Legal disclaimer and risk disclosure

This report has been prepared by BHF-BANK Aktiengesellschaft on behalf of itself and its affiliated companies (together "BHFBANK Group") solely for the information of its clients. The information and opinions in this document are based on sources believed to be reliable and acting in good faith, but no representation or warranty, express or implied, is made by any member of the BHF-BANK Group as to their accuracy, completeness or correctness. Opinions and recommendations are given in good faith but without legal responsibility and are subject to change without notice. The information does not constitute advice or personal recommendation, for which the duty of suitability would be owed, but may facilitate your own investment decision. Moreover, you should seek your own advice as to the suitability of an investment matter mentioned herein. Investors are reminded that the price of securities and the income from them can go down as well as up and that the past performance of an investment or a market is not necessarily indicative for future results. This document is for information purposes only. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete, and this document is not, and should not be construed as, an offer to sell or solicitation of any offer to buy the securities mentioned in it. BHF-BANK Group and its officers and employees may have a long or short position or engage in transactions in any of the securities mentioned in this document, or in any related securities. This publication must not be distributed in the United States. © 2009 BHF-BANK Aktiengesellschaft All rights reserved. Please mention source when quoting from it.

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