After a few weeks without a word about Greece nor the rest of peripheral Europe, this blissful silence may unfortunately come to an end this week, as the finance ministers of the EU gear up for another round of meetings on Friday. Focus could well center on Spain after the Italian Prime Minister Monti very shewdly deflected atttention from his own country by noting that Spain needs to be more proactive regarding its public budget. Thankfully we have until the end of the workweek so let us look at today's numbers instead:
- Mar. German IFO (08:00 GMT) to weaken in line with other surveys? It has not been a good March for Germany so far, after things were beginning to brighten earlier this year. While we still expect the second quarter to be better than the first, reports such as PMI Manufacturing (48.1 from 50.2 prior), PMI Services (51.8 from 52.8 prior) and ZEW Current Situation (37.6 vs. 40.3 prior) all point to either contraction or slower growth (ZEW Expectations did rise and beat, however with a 22.3 print vs. 5.4 prior). Consensus expects the IFO composite index (IFO Business Climate) to be unchanged at 109.6 in March with IFO Current Assessment dropping to 117 from 117.5 and IFO Expectations cancelling it out by rising to 102.6 from 102.3.
- Feb. US Chicago Fed National Activity Index (12:30) to show above-trend growth: The Chicago Fed's index of national activity is a monthly composite of 85 underlying individual time series ranging from nonfarm payroll to ISM manufacturing to wage growth and inflation pressures. A reading of 0 implies that the US economy is growing at trend growth (not zero growth) with January's reading of 0.22 the second (consecutive) reading above zero in a row after five eadings below.
- Feb. US Pending Home Sales (14:00) to rise a bit? Not all housing-related numbers were good last week, but there are plenty more to come this week. Last week Housing Starts, Existing Home Sales and New Home Sales all came in below expectations, though revisions played a role. Building Permits, a leading indicator, however, rose robustly to 717,000 in February from 682,000 (+5.1% m/m) - the highest level since late 2008,though they are of course still well below the bubble years where permits were consistently above 1.5 million. Today's report on Pending Home Sales, which leads Existing Home Sales by 1-2 months, is not expected to produce much fireworks with consensus looking for a 1% monthly rise. The annual growth rate is rather solid though at 10.3% (Jan.).