Today, we will get the first set of information about inflation in the euro area in August with the release of the German and Spanish figures. In line with our aggregate euro area forecast, we expect the drag from energy price inflation to continue to fade as the oil price has moved higher. Looking ahead, these base effects from the previous low oil price should lift inflation considerably and bring the euro area figure towards 1.0% at the end of the year.
The European Commission's economic sentiment indicator will provide more information about the state of the euro area economy. In July, the figure was slightly higher and continued to point to some economic progress despite the UK's decision to leave the EU. Based on the surprisingly resilient economic sentiment in the euro area we have revised our GDP forecast higher as growth in H2 looks likely to be higher than we previously expected (see Euro area: resilient PMIs - the recovery should continue , 23 August 2016).
In the US, the conference board consumer confidence for August is due for release. We expect it to be more or less unchanged around the current level. The Michigan consumer confidence index rose marginally in August after a decline in July. Overall, consumer confidence continues at a high level regardless of the type of measure.
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