Frankfurt Letter, week beginning May 16
The European Central Bank (ECB)
The European Central Bank (ECB) will conduct comprehensive assessment of four banks in 2016.
In 2016, the ECB banking supervisory board is undertaking a comprehensive assessment of four banks, Abanka d.d. (Slovenia), Akciju sabiedrība Rietumu Banka (Latvia), Banca Mediolanum S.p.A. (Italy) and Citibank Europe plc (Ireland).
The exercise began in March 2016 and its results are expected to be published in November 2016.
Seasonally adjusted Gross Domestic Product (GDP) rose by 0.5 percent in both the euro area and the European Union (EU) during the first quarter of 2016, compared with the previous quarter, according to a flash estimate published by Eurostat, the statistical office of the European Union.
In the fourth quarter of 2015, GDP grew by 0.3 percent and 0.4 percent respectively. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.5 percent in the euro area and by 1.7 percent in the EU in the first quarter of 2016, after a 1.6 percent and 1.8 percent rise respectively in the previous quarter.
In March 2016 compared with February 2016, seasonally adjusted industrial production fell by 0.8 percent in the euro area and by 0.5 percent in the EU, according to estimates from Eurostat.
In February 2016, industrial production fell by 1.2 percent in the euro area and by 1.0 percent in the EU.
News from Germany
Some German media accused Opel of rigging diesel pollution controls on the Zafira and Astra models. However, Opel, a subsidiary of General Motors, said in a statement that tests by the Environmental Action group were not objective or scientifically grounded. “Our software was never designed to cheat or deceive,” the company said.
On the other hand, the German economy gained pace at the start of this year. In the first quarter of 2016, GDP rose 0.7 percent in the fourth quarter of 2015 after adjustment for price, seasonal and calendar variations. The moderate growth path of last year (+0.3 percent in the last quarter of 2015) thus accelerated, reports the Federal Statistical Office (Destatis).
According to Destatis, consumer prices in Germany fell by 0.1 percent in April 2016 compared with April 2015. The inflation rate – measured by the consumer price index – decreased, following a slight increase in the previous month. A negative rate had last been recorded in January 2015 with -0.3 percent. Compared with March 2016, the consumer price index also fell by 0.4 percent in April.
The week ahead
This week, the global markets will monitor the Eurozone international trade in goods, inflation, production in construction and monthly balance of payments, as well as the news from the ECB.
In Germany, investors will focus on employees in manufacturing figures, detailed employment results and building permits.
By Abdulselam Durdak
Anadolu Agency / Frankfurt am Main