• While investors as well as analysts are still discussing the implications of the ECB's shift in its doctrine from implicit to explicit policy conditionality of its SMP actions, the global data week was dominated by downbeat industrial activity numbers. Risks of a delayed economic recovery have, therefore, risen.
  • Next Tuesday, Eurostat will publish the preliminary estimate for the EMU's economic activity in 2Q12. We expect real GDP to have contracted by 0.2% qoq after having been unchanged in 1Q. Underlying weakness should have been broad-based on an aggregate level, but heterogeneous among countries. Germany leads the pack.
  • Survey indicators generally disappointed in July, hinting at a further weakening of momentum entering 3Q12. While we still project EMU-wide real GDP to shrink another 0.2% in the current quarter, we now see some modest downside risks to our forecast – as we argue in our first focus piece.
  • Next Wednesday, quarterly house price figures for Germany will be released, most probably confirming the recent upward trend. It is, however, by no means excessive. The level of real house prices remains well below its long-term average and also other indicators, aggregated in our Overheating Barometer, do not show any signs of overshooting.
  • Editor's note: This is the last issue before our summer break. We will resume publishing on 13 September 2012.