In the eurozone, German ZEW expectations are due out today. Since July, ZEW expectations have followed a rising tendency to 13.8 in November but the December figure may bring this tendency to a halt. The Sentix released last week saw an unexpected fall, which maybe reflected the uncertainty related to the Italian referendum. However, although the 'no' vote in Italy on the Sunday caused an initial fall in equities on the Monday morning, they quickly recovered within the first few hours of the day. Therefore, we expect a somewhat unchanged ZEW with a risk of a small decrease.
The euro area employment growth figure for Q3 is also scheduled to be released today. The Q1 and Q2 figures were solid, with 0.4% quarterly employment growth, and we estimate a similar figure for Q3. Related to employment, the labour costs figure for Q3 is due to be released on Friday. Despite the solid employment growth in recent quarters, wage growth is still not picking up and we believe the ECB is still too optimistic in its projections on wage growth in the new forecast released this week. Labour costs growth has been very low in recent quarters and the Q2 figure was as low as 1% yearly growth. We estimate the Q3 figure remained low.
In the UK, CPI data for November due out today will attract extra attention ahead of the BoE meeting on Thursday. We estimate the headline index rose 0.2% m/m in November, implying that the CPI inflation rate rose to 1.1% y/y, from 0.9% in October. The increase is driven mainly by higher energy prices and a smaller negative contribution from non-energy industrial goods. We estimate the core index rose 0.2% m/m, implying an increase in the CPI core inflation rate to 1.4% y/y, from 1.2%.
In Scandinavia, attention turns to Swedish inflation. See next page.
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