Tuesday October 17 2017
Eurozone September Inflation Rate Confirmed at 1.5%
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

Consumer prices in the Euro Area increased by 1.5 percent year-on-year in September 2017, the same pace as in the previous month and in line with the preliminary estimate. Food prices rose further while cost of services and energy increased at a softer pace.

Year-on-year, unprocessed food prices jumped 1.5 percent after rising by 0.6 percent in August. Meanwhile, inflation was flat for processed food, alcohol and tobacco (at 2 percent) and non-energy industrial goods (at 0.5 percent), but slowed for energy (3.9 percent from 4 percent) and services (1.5 percent from 1.6 percent).

Among Eurozone's largest economies, the highest annual rates was registered in Germany (1.8 percent) and Spain (1.8 percent), followed by Italy (1.3 percent) and France (1.1 percent). 

Annual core inflation, which excludes volatile prices of energy, food, alcohol and tobacco and at which the ECB looks in its policy decisions, was also confirmed at 1.1 percent, compared with 1.2 percent in August.

On a monthly basis, consumer prices rose 0.4 percent, in line with market consensus and following a 0.3 percent gain in August.




Monday October 16 2017
Eurozone August Trade Surplus Smaller than Expected
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Euro Area trade surplus narrowed to EUR 16.1 billion in August 2017 from EUR 17.5 billion in the corresponding month of the previous year and way below market expectations of EUR 23.3 billion.

Exports of goods to the rest of the world increased by 6.8 percent to EUR 171.5 billion from EUR 160.6 billion in August 2016, while imports advanced at a faster 8.6 percent to EUR 155.4 billion from EUR 143.1 billion. Intra-euro area trade rose to EUR 132.9 billion, up by 7.6 percent compared with August 2016.

In January to August 2017, the trade surplus decreased to EUR 145.3 billion from EUR 172.2 billion in the same period of 2016, as exports grew 7.6 percent to EUR 1,437.6 billion and imports jumped 11.1 percent to EUR 1,292.4 billion.

Considering the European Union, the trade deficit fell to EUR 5.1 billion from EUR 8.2 billion a year ago. Exports rose 6.4 percent over a year earlier to EUR 145.5 billion and imports increased 3.9 percent to EUR 150.5 billion. 

In the first eight months of 2017, the trade surplus narrowed to EUR 5.5 billion from EUR 5.9 billion in the same period of 2016. Exports rose 9.3 percent to EUR 1,233.3 billion, boosted by sales of machinery and vehicles (7.4 percent); other manufactured goods (7.7 percent); chemicals (7.8 percent); food and drink (6 percent); energy (38.6 percent) and raw materials (19 percent). Shipments went up to the US (4 percent), China (19.2 percent), Switzerland (13.1 percent), Russia (22.3 percent) and Turkey (5.9 percent). Imports went up 9.4 percent to EUR 1,227.8 billion, boosted by purchases of machinery and vehicles (7.7 percent); other manufactured goods (6.6 percent); energy (34.6 percent); chemicals (5.5 percent); raw materials (17.3 percent) and food and drink (4.5 percent). Imports went up from the US (3.4 percent), China (7.1 percent), Russia (28.1 percent) and Turkey (5.2 percent). 




Thursday October 12 2017
Eurozone Industrial Output Rises Faster than Expected
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

Industrial production in the Euro Area increased by 3.8 percent year-on-year in August 2017, beating market expectations of 2.5 percent and following an upwardly revised 3.6 percent gain in July. Output rose at a faster pace for intermediate, capital and non-durable consumer goods. Among Eurozone's largest economies, industrial production grew faster in Germany, Italy and Spain.

Year-on-year, production grew at a faster pace for most categories: Intermediate goods (5.3 percent from 5.1 percent in July); capital goods (4.9 percent from 4.6 percent) and non-durable consumer goods (2.4 percent from 0.5 percent). Meanwhile, production of durable consumer goods rose at a slower 3.6 percent after an increase of 6.3 percent in July, and energy output contracted 0.7 percent, following a gain of 1.1 percent in the previous month.

In the EU28, industrial output advanced by 3.9 percent, following a 3.3 percent gain in July, driven by higher production of capital goods (5.5 percent from 4.8 percent in July); intermediate goods (5.3 percent from 5 percent); and non-durable consumer goods (2.3 percent from 0.5 percent). On the other hand, durable consumer goods output rose at softer rate (3.6 percent from 5 percent in July) and production of energy shrank (-0.4 percent from a flat reading).

Among EU Member States for which data are available, the highest increases in industrial production were registered in Lithuania (13.1 percent), Latvia (12.1 percent) and Romania (10.3 percent). Also, output grew in Italy (5.7 percent), Germany (4.7 percent), Spain (2.5 percent) and France (1.3 percent). In contrast, a decrease was observed in the Netherlands (-1.8 percent).

On a monthly basis, industrial output increased 1.4 percent, above market expectations of 0.5 percent, due to strong production of capital goods (3.1 percent), durable consumer goods (1.3 percent) and intermediate goods (1.2 percent). 

In the EU28, output jumped 1.7 percent, due to production of capital goods rising by 3.2 percent, durable consumer goods by 1.2 percent, intermediate goods by 1 percent, energy by 0.7 percent and non-durable consumer goods by 0.4 percent.

Among EU Member States for which data are available, the largest increases in industrial production were registered in the Czech Republic (14.3 percent), Malta (5.4 percent) and Portugal (4.7 percent). Also, output fell in Germany (3 percent), Italy (1.2 percent) and Spain (1.1 percent). The highest decreases were recorded in the Netherlands (-2.3 percent), Sweden (-1.8 percent) and France and Finland (both -0.4 percent).




Thursday October 05 2017
ECB Policymakers Discuss QE Extension Scenarios: Minutes
ECB | Joana Ferreira | joana.ferreira@tradingeconomics.com

ECB policymakers agreed that a decision on the path of central bank’s policy instruments will be warranted until the end of the year and started to discuss some trade-off between the size and duration of the net asset purchases, minutes from the ECB's September meeting showed. Also, they continued to show concerns about the stronger euro.

Excerpts from the Account of the monetary policy meeting of the Governing Council of the European Central Bank, held in Frankfurt am Main on Wednesday and Thursday, 6-7 September 2017:

While the recent appreciation of the euro exchange rate was seen to reflect to some degree the improved macroeconomic environment in the euro area and the associated market assessment of the outlook for the ECB’s monetary policy relative to that of other major central banks, concerns were expressed, notably about the recent momentum. There was wide agreement that the recent movements in the euro exchange rate represented a source of uncertainty, which required monitoring with respect to its medium-term implications for price stability.

Moreover, as the end of the intended horizon of the net asset purchases was approaching, members reiterated that a decision was warranted in the autumn on the ECB’s policy instruments beyond the end of the year. This decision would need to be based on a thorough assessment of the outlook for inflation, the risks surrounding this outlook, and the monetary policy stance and financial conditions needed for a sustained return of inflation rates towards levels below, but close to, 2%. Accordingly, the Eurosystem committees would continue their technical work on examining possible scenarios for the future evolution of policy instruments, considering their impact on financial conditions and the medium-term outlook for inflation and also looking at the experience of other central banks.

Subsequently members had a very preliminary exchange of views about the future monetary policy stance and the considerations that might guide a recalibration of instruments and the transmission channels through which they shape financial conditions and the outlook for price stability. There was broad agreement that continued substantial support from monetary policy was still needed to ensure a sustained return of inflation rates towards levels below, but close to, 2% over the medium term. At the same time, a stronger euro area economy and the dissipation of deflationary risks underpinned increased confidence that the Governing Council’s inflation aim would be achieved over the medium term.

A view was put forward that conditions were increasingly falling into place that would allow the intensity of monetary policy accommodation to be adapted and would provide an opportunity to scale back the Eurosystem’s net asset purchases.

Members also discussed some general trade-offs inherent in various scenarios for the future recalibration of the APP and, in particular, the choice between the pace and the intended duration. Within the framework of the Governing Council’s forward guidance, the benefits from a longer intended purchase horizon, combined with a greater reduction in the pace, were compared with those from a shorter period of purchases and larger monthly volumes. In this context, the point was again made that both the costs and benefits of extending APP purchases, including possible financial stability risks, needed to be taken into account.

As regards the timing of prospective policy decisions by the Governing Council, there was broad agreement that the bulk of the decisions, including the strategy for recalibrating the policy instruments, could be taken at the forthcoming monetary policy meeting in October, while the possibility that some technical decisions could be taken at a later stage could not be ruled out.




Monday October 02 2017
Euro Area Jobless Unchanged at 9.1%
Eurostat | Joana Taborda | joana.taborda@tradingeconomics.com

The unemployment rate in the Euro Area was steady at 9.1 percent in August of 2017, the same as in the previous two months but slightly higher than market expectations of 9 percent. It is the lowest jobless rate since February of 2009. A year earlier, the unemployment rate was higher at 9.9 percent.

Compared with July of 2017, the number of unemployed persons decreased by 42,000 to 14.751 million. Compared with the previous year, it fell by 1.319 million.

Considering the European union, the unemployment declined to 7.6 percent from 7.7 percent in July and 8.5 percent a year earlier. There were 18.747 million unemployed persons, down by 104,000 from the previous month and by 1.923 million from the previous year.  

Among the Member States, the lowest unemployment rates in August 2017 were recorded in the Czech Republic (2.9 percent), Germany (3.6 percent) and Malta (4.2 percent). The highest unemployment rates were observed in Greece (21.2 percent in June 2017) and Spain (17.1 percent). Compared with a year ago, the unemployment rate fell in all Member States for which data is comparable over time, except Finland where it remained stable. The largest decreases were registered in Cyprus (from 13.1 percent to 10.7 percent), Greece (from 23.5 percent to 21.2 percent between June 2016 and June 2017) and Spain (from 19.3 percent to 17.1 percent).

In August 2017, 3.754 million young persons (under 25) were unemployed in the EU28, of whom 2.668 million were in the Euro Area. Compared with August 2016, youth unemployment decreased by 426 000 in the EU28 and by 240 000 in the Euro Area. In August 2017, the youth unemployment rate was 16.7 percent in the EU28 and 18.9 percent in the Euro Area, compared with 18.5 percent and 20.6 percent respectively in August 2016. In August 2017, the lowest rate was observed in Germany (6.4 percent), while the highest were recorded in Greece (43.3 percent in June 2017), Spain (38.7 percent) and Italy (35.1 percent).




Friday September 29 2017
Eurozone September Inflation Rate Weaker than Expected
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

Eurozone consumer price inflation came in at 1.5 percent year-on-year in September 2017, unchanged from the previous month's four-month high and below market expectations of 1.6 percent. Food prices rose further while cost of services and energy increased at a softer pace.

Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in September (3.9 percent, compared with 4 percent in August), followed by food, alcohol and tobacco (1.9 percent, compared with 1.4 percent in August), services (1.5 percent, compared with 1.6 percent in August) and non-energy industrial goods (0.5 percent, stable compared with August).

Annual core inflation, which excludes volatile prices of energy and unprocessed food and tobacco and at which the ECB looks in its policy decisions, eased to 1.1 percent from 1.2 percent August.


Monday September 18 2017
Eurozone August Inflation Rate Confirmed at 4-Month High
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

Consumer prices in the Euro Area increased by 1.5 percent year-on-year in August 2017, in line with the preliminary estimate and following a 1.3 percent gain in the previous month. It was the highest inflation rate since April, boosted by a jump in energy prices.

Year-on-year, energy prices jumped 4 percent after rising by 2.2 percent in July. Additional upward pressure came from: Processed food, alcohol and tobacco (2 percent from 1.9 percent in July); services (1.6 percent, the same as in July); unprocessed food (0.6 percent, the same as in July); and non-energy industrial goods (0.5 percent, the same as in July).

Among Eurozone's largest economies, the highest annual rate was registered in Spain (2 percent), followed by Germany (1.8 percent), Italy (1.4 percent) and France (1 percent). 

Annual core inflation, which excludes volatile prices of energy and unprocessed food and tobacco and at which the ECB looks in its policy decisions, was also confirmed at 1.2 percent, unchanged from July.

On a monthly basis, consumer prices rose 0.3 percent, in line with market consensus and after dropping 0.5 percent in July.


Friday September 15 2017
Eurozone Trade Surplus Narrows Less than Expected
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Euro Area trade surplus narrowed to EUR 23.2 billion in July 2017 from EUR 24.8 billion in the corresponding month of the previous year. Still, the reading came in above market expectations of EUR 21.4 billion.

Exports of goods to the rest of the world increased by 6.1 percent to EUR 177.7 billion from EUR 167.6 billion in July 2016, while imports advanced at a faster 8.2 percent to EUR 154.6 billion from EUR 142.8 billion. Intra-euro area trade rose to EUR 145.6 billion, up by 5.6 percent compared with July 2016.

In the the seven months to July, the trade surplus narrowed to EUR 130.2 billion from EUR 154.1 billion in the same period of 2016.

Considering the European Union, the trade surplus widened to EUR 8.8 billion from EUR 3.0 billion a year ago. Exports rose 9.7 percent over a year earlier to EUR 155.8 billion and imports increased 5.6 percent to EUR 146.9 billion. 

In the first seven months of 2017, the trade surplus narrowed to EUR 10.8 billion from EUR 14.0 billion in the same period of 2016. Exports rose 9.6 percent to EUR 1,087.3 billion, boosted by sales of machinery and vehicles (7.3 percent); other manufactured goods (7.6 percent); chemicals (8.6 percent); food and drinks (5.5 percent); energy (43.3 percent) and raw materials (19.9 percent). Shipments went up to the US (4.3 percent), China (18.6 percent), Switzerland (14.7 percent), Russia (23 percent) and Turkey (5.5 percent). Imports went up 10.1 percent to EUR 1,076.5 billion, boosted by purchases of machinery and vehicles (7.9 percent); other manufactured goods (6.7 percent); energy (37.8 percent); chemicals (5.7 percent); raw materials (18.7 percent) and food and drinks (4.5 percent). Imports went up from the US (4.1 percent), China (7.4 percent), Russia (30 percent) and Turkey (5.5 percent). 


Wednesday September 13 2017
Eurozone Industrial Output Rises Less Than Expected
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

Industrial production in the Euro Area increased by 3.2 percent year-on-year in July 2017, missing market expectations of 3.4 percent and following an upwardly revised 2.8 percent gain in June. Output rose at a faster pace for intermediate, capital and durable consumer goods.

Year-on-year, production grew at a faster pace for most categories: Durable consumer goods (5.7 percent from 3.9 percent in June); capital goods (4.3 percent from 1.5 percent); and intermediate goods (4.8 percent from 4.2 percent). Meanwhile, energy production went up 1.2 percent after an increase of 4.7 percent in June, and output of non-durable consumer goods contracted 0.5 percent, following a gain of 1 percent in the previous month.

In the EU28, industrial output advanced by 3.1 percent, the same pace as in the previous month, driven by higher production of durable consumer goods (5 percent from 4.1 percent in June); capital goods (4.6 percent from 2.4 percent); and intermediate goods (4.8 percent from 4.2 percent). On the other hand, energy output rose at softer rate (0.1 percent from 3.7 percent in June) and production of non-durable consumer goods shrank (-0.4 percent from 1.5 percent).

Among EU Member States for which data are available, the highest increases in industrial production were registered in Slovakia (9.2 percent), Latvia (8.9 percent) and Romania (7.6 percent). Also, output grew in Germany (3.9 percent), France (3.6 percent), Italy (4.4 percent) and Spain (1.9 percent). In contrast, decreases were observed in Ireland (-9.2 percent), Denmark (-3.1 percent) and Malta (-1.7 percent).

On a monthly basis, industrial output increased 0.1 percent, in line with market expectations, due to stronger production of capital goods (0.8 percent), durable consumer goods (0.7 percent) and intermediate goods (0.5 percent). By contrast, energy output fell 1.2 percent and production of non-durable consumer goods declined 0.4 percent.

In the EU28, output fell 0.3 percent, due to production of energy falling by 1.1 percent and non-durable consumer goods
by 0.6 percent, while production of durable consumer goods rose by 0.2 percent and that of both intermediate goods and
capital goods by 0.4 percent.

Among EU Member States for which data are available, the largest decreases in industrial production were registered in the Czech Republic (-9.8 percent), Hungary (-4.1 percent), Malta and Slovakia (both -3.3 percent). Also, output fell in Germany (-0.1 percent) and Spain (-0.4 percent). The highest increases were recorded in Portugal (1.9 percent), Ireland (1.8 percent) and France (0.6 percent).


Thursday September 07 2017
ECB Leaves Monetary Policy Unchanged
ECB | Joana Ferreira | joana.ferreira@tradingeconomics.com

The ECB held its benchmark refinancing rate at 0 percent on September 7th, and confirmed the net asset purchases are intended to run at the current monthly pace of €60 billion until the end of December 2017, saying that a very substantial degree of monetary accommodation was still needed to support inflation. However, President Draghi said discussions on tapering QE will likely start this autumn, despite the euro being a source of uncertainty for inflation.

Excerpts from the Introductory statement to the press conference by Mario Draghi:

While the ongoing economic expansion provides confidence that inflation will gradually head to levels in line with our inflation aim, it has yet to translate sufficiently into stronger inflation dynamics. Measures of underlying inflation have ticked up slightly in recent months but, overall, remain at subdued levels. Therefore, a very substantial degree of monetary accommodation is still needed for underlying inflation pressures to gradually build up and support headline inflation developments in the medium term. If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, we stand ready to increase our asset purchase programme in terms of size and/or duration. This autumn we will decide on the calibration of our policy instruments beyond the end of the year, taking into account the expected path of inflation and the financial conditions needed for a sustained return of inflation rates towards levels that are below, but close to, 2%.

This assessment is broadly reflected in the September 2017 ECB staff macroeconomic projections for the euro area. These projections foresee annual real GDP increasing by 2.2% in 2017, by 1.8% in 2018 and by 1.7% in 2019. Compared with the June 2017 Eurosystem staff macroeconomic projections, the outlook for real GDP growth has been revised up for 2017, reflecting the recent stronger growth momentum, and is broadly unchanged thereafter.

Risks surrounding the euro area growth outlook remain broadly balanced. On the one hand, the current positive cyclical momentum increases the chances of a stronger than expected economic upswing. On the other hand, downside risks continue to exist, primarily relating to global factors and developments in foreign exchange markets.

Euro area annual HICP inflation was 1.5% in August. Looking ahead, on the basis of current futures prices for oil, annual rates of headline inflation are likely to temporarily decline towards the turn of the year, mainly reflecting base effects in energy prices. At the same time, measures of underlying inflation have ticked up moderately in recent months, but have yet to show convincing signs of a sustained upward trend. Domestic cost pressures, notably from labour markets, are still subdued. Underlying inflation in the euro area is expected to rise gradually over the medium term, supported by our monetary policy measures, the continuing economic expansion, the corresponding gradual absorption of economic slack and rising wages.

This assessment is also broadly reflected in the September 2017 ECB staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 1.5% in 2017, 1.2% in 2018 and 1.5% in 2019. Compared with the June 2017 Eurosystem staff macroeconomic projections, the outlook for headline HICP inflation has been revised down slightly, mainly reflecting the recent appreciation of the euro exchange rate.