According to analysts from Danske Bank, next week, growth data will be in focus in the Eurozone, where German ZEW and preliminary GDP for Q3 are due to be released. They also point out that Tuesday is the deadline for Italy to send a revised budget to the EU Commission.
“In the euro area, the revised HICP and core inflation figures for October are due out on Friday. The initial estimates were 2.1% y/y and 1.1% y/y for headline and core inflation, respectively, and we do not expect any revisions to these numbers but we will look out for the higher core inflation drivers.
“ZEW figures for November are due on Tuesday. Current conditions started the year at 95.2 and economic expectations started it at 20.4. In October, these had fallen to 70.1 and -24.7, respectively. In November, we expect some stabilisation of the economic expectations figure, driven not least by the latest signs that a ceasefire in the US-China trade war is becoming more likely.
“In Germany, preliminary Q3 GDP figures are due on Tuesday. We expect GDP growth to come in at 0.3% q/q. However, we see a significant downside risk to this forecast in light of both falling PMI and Ifo figures and production bottlenecks in the German car sector, which is struggling to adjust to new emissions test procedures.·
“On Tuesday, the deadline expires for the Italian government to send a revised budget draft to Brussels. As market pressure has eased somewhat in recent weeks now ratings decisions are out of the way, our base case is that the government will not comply with the Commission's request. Hence, we believe a further standoff is in store, with the Commission likely to proceed by initiating an excessive deficit procedure against the country.”
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