EU Q4 likely off to a sluggish start – Capital Economics
FXstreet.com (Barcelona) - Ben May of Capital Economics believes that tomorrow's flash Spanish GDP at 08:00 GMT is likely to show that GDP shrunk 0.4% in Q3, in line with the Bank of Spain's own estimate.
However, he expects to see a rise in household spending in Q3 as consumers aimed to beat the coming VAT hike in September. However, "given this and the fact that the business surveys suggest that the economic situation deteriorated as Q3 went on, a sharper fall might be to come in Q4."
Elsewhere in the Eurozone, Jennifer McKeown notes that the October EC Business and Consumer Survey at 10:00 GMT is likely to support other evidence that the EZ economy started Q4 on a very weak note. While the flash estimate revealed that consumer confidence had edged up, national surveys point to declines in industrial and service sector sentiment.
McKeown therefore has penciled in "a fall in the composite Economic Sentiment Indicator from 85.0 to 84.0, which would leave it pointing to annual falls in euro-zone GDP of about 2.5%."
However, he expects to see a rise in household spending in Q3 as consumers aimed to beat the coming VAT hike in September. However, "given this and the fact that the business surveys suggest that the economic situation deteriorated as Q3 went on, a sharper fall might be to come in Q4."
Elsewhere in the Eurozone, Jennifer McKeown notes that the October EC Business and Consumer Survey at 10:00 GMT is likely to support other evidence that the EZ economy started Q4 on a very weak note. While the flash estimate revealed that consumer confidence had edged up, national surveys point to declines in industrial and service sector sentiment.
McKeown therefore has penciled in "a fall in the composite Economic Sentiment Indicator from 85.0 to 84.0, which would leave it pointing to annual falls in euro-zone GDP of about 2.5%."
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