REPORT
By Abdulselam Durdak
Frankfurt letter, week beginning Nov. 7

-Eurozone inflation still out of target

Last week investors focused mainly on inflation and growth data in the Eurozone. While growth was in line with expectations, inflation continued to grow slowly and remained below target, at close to 2 percent.

Euro area annual inflation was expected to be 0.5 percent in October 2016, up from 0.4 percent in September 2016, according to a flash estimate from Eurostat, the statistical office of the European Union.

However, seasonally adjusted GDP rose by 0.3 percent in the Euro area and by 0.4 percent in the European Union during the third quarter of 2016, compared with the previous quarter, according to Eurostat’s preliminary flash estimate. In the second quarter of 2016, GDP had also grown by 0.3 percent in the Euro area and by 0.4 percent in the EU.

Last week, the Eurozone and European Union unemployment data was released. The Euro area seasonally-adjusted unemployment rate was 10.0 percent in September 2016, stable compared to August 2016 and down from 10.6 percent in September 2015. The EU unemployment rate was 8.5 percent in September 2016, stable compared to August 2016 and down from 9.2 percent in September 2015.

 

-News from Germany

Unemployment in Germany sank in October to a new low since reunification in 1990, official data showed Wednesday. Unemployment now stands at 6 percent, the lowest level since West and East Germany reunited in 1990 after the fall of the Berlin Wall the previous year.

In 2015, 16.1 million people, or 20.0 percent, of Germany's population, were at risk of poverty or social exclusion.  This share has remained nearly unchanged since 2008. This is a result of the EU-SILC (LEBEN IN EUROPA) survey. The Federal Statistical Office (Destatis) also reports that for the period examined the proportion of poor or socially excluded people in the European Union as a whole has always been considerably higher than in Germany (2015: 23.7 percent).

 

-The week ahead

This week, markets will continue to monitor the developments on global markets and focus on the European Central Bank’s statements and EU Finance Ministers’ meeting. On the data side, Germany factory orders and trade balance, Eurozone Sentix Investor Confidence and retail sales data will be released.

 

Abdulselam Durdak

AA – Frankfurt

 

 

07 Nov,2016

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