Eurozone key events ahead: ECB, PMI and IFO - Danske Bank
|Next week, the key event in the Eurozone will be the European Central Bank meeting on Thursday. Analysts from Danske Bank expect the central bank to announce an extension of the purchase program by nine months at a pace of EUR30bn.
Key Quotes:
“In the euro area, the most important event of the week is the ECB meeting on Thursday. We have changed our call and now expect the ECB to announce a QE extension of nine months at a pace of EUR30bn. In our view, a larger scaling down of purchases would ease future QE implementation and higher reinvestment volumes of maturing bonds would also add to the monthly QE flows in 2018. Apart from a scaling down of QE purchases, we expect the ECB to make no changes to its forward guidance at the upcoming meeting.”
“The PMIs are due for release on Tuesday. Manufacturing PMI has been on a rising trend since August 2016, getting close to the post-financial crisis peak of 59.0 in February 2011. In October, we expect manufacturing PMI to remain around the current level of 58.1, as the stronger euro may have started to affect new export orders adversely. After four straight months of decline, services PMI recovered in September to 55.8 and we believe services PMI will increase further in October to 56.2. Overall, the high PMIs support our expectation of robust growth for H2 in the euro area.”
“On Wednesday, we are due to get German ifo expectations, which we expect to rise further to 107.9 in October, in line with the improved economic expectations indicated by the ZEW October release last week.”
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