> The most important data this week will be the industrial production indices in Europe. Germany and Spain (8) and France, Italy and UK (10).
Their momentum will reflect and highlight the risk of recession in Europe as corporate surveys are weak throughout Europe.. Germany has been weak recently and corporate surveys during summer and in September have validated the possibility of a deep recession in Germany.
In Italy, the dynamics remains low and risks are on the downside
In Spain, the momentum is lower since the end of spring. This has forced the Bank of Spain to revised down its forecasts for 2020 and 2021. The industrial figure will show if the downside risk has to be seen as soon as 2019
In the UK, the uncertainty associated with the Brexit leads to lower growth in the industrial sector.
In France, the momentum is still robust
> In Japan, households’ spending in August (8) will be interesting as a VAT rate hike is expected in October.
We remember that after the previous VAT rate hike in April 2014, the impact has been very important and persistent on households’ behavior. It has been depressing at this time. Can we forecast the same dynamics ?
> Jolts survey (9) in the US will probably confirm the change in the labor market trend in the US. That’s already how it is perceived by households.
> Inflation rate in the US with the CPI (10) which has an upside bias when compared to the favored Fed’s measure (PCE). The core inflation rate was at 2.4% in August which is high.
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