Eurozone key event for next week- Danske Bank

Analysts from Danske Bank point out that in the euro area, the week ahead is packed with economic releases, including inflation figures for January, which are due out on Tuesday.

Key Quotes: 

“The HICP inflation figures for January are set to be released on Tuesday. Energy price inflation has maintained the upwards lift to headline inflation, which we expect to rise to 1.5% y/y in January, up from 1.1% y/y in December. However, we still see no signs that core inflation is picking up, so we expect it to remain at its 0.9% level in January. We expect headline inflation to increase further in February but core inflation to remain unchanged. Note that the German inflation figures for January are set to be released on Monday.”

“The euro area unemployment rate for December will also be released on Tuesday. We have seen a declining trend throughout 2016 to the 9.8% level observed in November. We expect the unemployment rate to decline further to 9.7% in December.”

“Euro area GDP figures for Q4 will also be released on Tuesday. Survey indicators such as PMIs, Ifo and consumer confidence have suggested solid growth in Q4, rallying from the more modest growth of 0.3% in Q3. We expect GDP growth of 0.5% in Q4 in the euro area. Note that French GDP is released earlier on Tuesday and Spanish GDP will be released on Monday.”

“Tuesday also brings us the German retail sales for December. We expect the figures to show a strong monthly increase in December following the decline in November as German consumer confidence has remained stable throughout Q4 16 and other survey indicators suggest strong growth in Q4.”

“On Friday, the euro area retail sales figures for December are released. We expect a strong figure with a 0.7% monthly increase, following the 0.4% monthly decline in November. Euro area consumer confidence has been rising from August through December and other survey indicators have created high expectations for Q4 growth. Thus, we expect the retail sales figures to reflect strong growth in Q4.”