Eurozone Week Ahead: Calendar This Week Includes Second Reading of German Q2 GDP

The calendar this week includes the second reading of German Q2 GDP (Thursday), which is expected to be confirmed at 0.5% q/q in the headline reading, but will also come with the full breakdown. Growth is expected to have been supported by consumption and investment, while net trade is expected to have stalled.

Action Economics said that growing protectionism on a global level is adding to concerns about the medium term outlook for Germany’s large industrial sector, which will is also under threat from a hard Brexit scenario. Looking ahead, major moves are not expected in the preliminary August Markit purchasing managers index readings for the eurozone for August (Thursday).

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Action Economics expects the manufacturing number to be marginally lower at 55.0 (median same) versus 55.1 in July, while the services number is expected to pick up to 54.4 (median same ) from 54.2, which should leave the composite at 54.4 (med 54.5), marginally higher than the 54.3 reported for the previous month.

Action Economics said that PMIs remain consistent with ongoing growth as companies have sufficient business and unfilled orders in hand to keep production going, but order inflow is slowing as uncertainty about the outlook increases.

Spain sells bills on Tuesday, and Germany has 2 major auctions scheduled, with a 2-year Schatz note on sale Tuesday, followed by a 10-year Bund on Wednesday.

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