August 2017 Market Outlook for EU

While there are serious concerns surrounding the UK economy, the picture seems relatively rosy in the Euro Area. On July 24, the International Monetary Fund raised its 2017 growth forecasts for the four largest Eurozone countries, namely Germany, France, Italy and Spain. Here are the market-moving indicators to look out for in August.

August 1: Germany Unemployment Rate (July)

Germany’s jobless total rose by 7,000 to 2.547 million in June, missing market expectations of a 9,000 decline and marking the first increase in 15 months. The unemployment rate is widely expected to remain unchanged at 5.7% in July, while the jobless total figure is estimated widely to increase to 2.79 million by the end of Q3 2017. Economy Minister Sigmar Gabriel had said that both the number employed and the jobless figure would increase in 2017 due to “the gradual integration of refugees into the job market”

August 2: US Employment Change (July)

In the US, 158,000 jobs were created in June, although this missed market expectations of 185,000. Expectations are for an increase in job creation to 171,300 in July.


August 3: BoE Interest Rate Decision

The Bank of England (BoE) had kept its benchmark rate unchanged at a record low of 0.25% at its June meeting. Policymakers expressed concerns related to rising inflation and slow pay growth. The interest rate is widely expected to be kept unchanged at 0.25% at the August meeting.


August 4: US Balance of Trade (June)

The US trade deficit narrowed to US$46.5 billion in May, from US$47.6 billion in April. Market expectations are for a further narrowing of the trade deficit in June to US$44.2 billion.


August 8: Germany Balance of Trade (June)

Germany’s trade surplus had widened to €22.0 billion in May of 2017 from €20.7 billion in the same month a year earlier, beating the forecast of €17.2 billion.

August 15: Germany GDP Growth Rate (Q2)

The German economy grew 1.7% year-on-year and 0.6% quarter-on-quarter in Q1 and the growth rates are expected to remain unchanged in Q2.

August 16: Italy GDP Growth Rate (Q2), Eurozone GDP Growth Rate (Q2), UK Unemployment Rate (June)

Italy’s economy grew 0.4% quarter-on-quarter in Q1 and is widely expected to decelerate to 0.3% in Q2. The Eurozone economy is expected to record 1.8% year-on-year and 0.4% quarter-on-quarter growth for Q2, down from 1.9% and 0.6% in Q1. Meanwhile, the unemployment rate in the UK declined to 4.5% in May, representing the lowest jobless rate since June 1975. Expectations are for an increase in June to 4.7%.

August 17: France Unemployment Rate (Q2), Eurozone Balance of Trade (June), Eurozone Inflation Rate (July)

The unemployment rate in France declined 9.6% in Q1, from 10% in the prior quarter. The jobless rate is expected to remain stable at 9.6% in Q2. The Eurozone’s trade surplus narrowed to €21.4 billion in May, from €23.4 billion a year earlier. Meanwhile, the region’s core inflation rate rose 1.10% in June and the market consensus calls for a decline in the rate to 1.06% in July, with the overall inflation rate easing from 1.3% in June to 1.19% in July.


August 22: Germany Economic Sentiment Index (August)

The ZEW Indicator of Economic Sentiment for Germany slipped to 17.5 in July, after having risen to 18.6 in June, and missed the market consensus of 18. It is widely expected to decline further to 17.12 in August.


August 23: Eurozone Consumer Confidence (August)

Eurozone’s consumer confidence index declined to -1.7 in July, from -1.3 in June. The index came in worse than market expectations of -1.1. Expectations are for a worsening in the index in August to -1.56.

August 25: Germany Consumer Confidence (September), Germany Business Climate (August)

Germany’s consumer confidence index for August is set to remain unchanged at 10.6, after having risen in July to the highest reading since October 2001. Expectations are for the index to improve to 10.71 in September. Meanwhile, Germany’s business climate index surged to 116 in July, after rising to 115.2 in June, the highest reading since 1991. The reading beat market expectations of 114.9 and is now expected to rise to 116.63 in August.

August 31: Eurozone Unemployment Rate (July)

The Eurozone unemployment rate came in at 9.3% in May. The index is expected to record a decline to 9.2% in June and remain unchanged at that rate in July.

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Source:: August 2017 Market Outlook for EU

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