German inflation and French GDP amongst market movers today – Danske Bank

According to Danske Bank analysts, after a data-thin start of the week, there will be several important data releases today, which could affect markets' expectations about global monetary policy steps as this morning France and Sweden are set to release Q2 19 preliminary GDP growth.

Key Quotes

“The French economy probably held up well in Q2 19, leaning on improved consumers' purchasing power and supported by the stimulus package.”

“In Sweden, we expect GDP to shrink 0.2% q/q versus the previous expansion of 0.6% q/q and versus Bloomberg consensus median of 0.3% q/q growth. On an annual basis, we expect Sweden to grow 1.4% y/y versus 2.1% y/y expansion in Q1 19.”

“In Norway, we expect retail sales to rebound 0.6% m/m. Retail sales has been a weak spot for some time in Norway and a rebound would confirm the improved purchasing power stemming from higher employment, rising nominal wage growth and lower electricity prices.”

“Germany's preliminary inflation figures for July are likely to show a marginal deceleration on an annual basis from the previous month as fuel prices headed down. The figures will give a first clue where euro area core inflation is heading in July (out tomorrow). With energy prices and core inflation decelerating slightly, we expect German HICP inflation to fall back in July from June's 1.5%.”

“The European Sentiment Indicator (ESI) will provide the last piece of the puzzle in terms of European business surveys in July. With PMI, Ifo and ZEW all telling a story of a deepening manufacturing downturn at the start of Q3, we would be surprised to see a different message emerging from today's ESI reading.”

“Today's bunch of data from the US ahead of tomorrow's FOMC meeting includes consumer confidence for July, personal consumption growth, (core) PCE deflator and income figures for June and home-price dynamics for May. Consumer confidence has likely improved on positive labour market dynamics in June, but the personal consumption expenditure deflator, which is closely followed by the Fed, has probably slid slightly on a monthly basis, while expanding on an annual basis.”