Evdokia

Evdokia Pitsillidou, Head of Risk Management at easyMarkets.

She specialises in commodities, options and currencies and loves to solve analytical problems and overcome challenges.

Evdokia Pitsillidou, Head of Risk Management, easyMarkets

The Eurozone economy faces several question marks in the fourth quarter. Weak growth, an escalating banking crisis and an upcoming referendum in Italy are just some of the challenges gripping the currency region. Surprisingly, the euro has held up relatively steady for most of the year, at least until recently. The EUR/USD has declined 2.5% over the past four weeks, as investors rallied behind the dollar on growing signs the Federal Reserve will raise interest rates by the end of the year. For traders of the euro, November is a critical month on the economic calendar. Below is a list of high-profile market releases that could impact European financial assets.

November 3: Eurozone Unemployment Rate (September)

Unemployment is one of the most closely followed indicators in the financial markets. Eurozone unemployment has been gradually declining over the years, but remains above 10%. This is unlikely to change in September.

November 4: Eurozone Producer Price Index (September)

The consumer price index (CPI) isn’t the only form of inflation traders monitor. The producer price index (PPI) measures the prices paid in primary markets. Producer price inflation have shown signs of recovery this year, but have been inconsistent.

November 7: Eurozone Retail Sales (September)

Retail sales are an important proxy of consumer spending in the economy. Sales slipped 0.1% in August, but were up 0.6% compared to year ago levels. Traders bullish on the euro usually look for a high retail sales reading.

November 8: Germany Industrial Production, Trade Balance (September)

Germany is not only Europe’s largest economy, it’s also the region’s foremost industrial centre. On November 8, the Federal Statistics Office will report on industrial production and trade, two key measures of the German economy.

November 11: Germany Consumer Price Index (October)

The German government will release its final estimate of October consumer inflation on November 11. This includes both the consumer price index (CPI) and the harmonized index of consumer prices (HICP).

November 14: Eurozone, Germany Industrial Production (September)

Industrial production, a broad measure of factory output that includes activity at manufacturing, mining and utilities companies, rebounded sharply in August, fueling hopes that the 19-member euro area was regaining momentum. Industrial output climbed 1.6% from July and 1.8% compared to a year ago. The uptick also eased concerns that a sharp fall in the British pound would weaken demand for Eurozone goods.[1]

November 15: Eurozone, Germany Trade Balance (September), Gross Domestic Product (Q3), ZEW Economic Sentiment Survey (November)

In terms of data releases, November 15 is expected to be one of the most active days of the month. Headlining the releases is third quarter gross domestic product (GDP), one of the most important events of the quarter. The Eurozone economy expanded just 0.3% in the second quarter, as growth in Germany cooled and Italy stagnated unexpectedly. Growth in the wider 28-nation EU was 0.4%.[2]

Germany will also release separate Q3 GDP data on November 15.

Separately, the European Commission’s statistics branch will release official trade data for September. The Eurozone’s trade balance beat expectations in August on rising German exports.[3]

Meanwhile, the Centre for European Economic Research (ZEW) will release its latest economic sentiment indicators for Germany and the broader euro area.

November 17: Eurozone Consumer Price Index (October), ECB Monetary Policy Accounts

The European Commission will also release its final estimate of October consumer price inflation on November 17. This report will be closely followed by the financial markets because of its implications on European Central Bank (ECB) policy. The ECB has been desperately trying to re-inflate the economy, and a failure to do so has raised speculation about the future of monetary policy.

The ECB will also release its Monetary Policy Meeting Accounts on the same day. The Meeting Accounts contain an overview of financial market and economic developments impacting the euro area region.

November 23: EU Financial Stability Review

The ECB will release its biannual Financial Stability Review on November 23. The May edition covered topics related to the macro-financial environment, financial markets and euro area financial institutions.[4]

[1] Paul Hannon (October 12, 2016). “Eurozone Industrial Production Picks Up in August.” The Wall Street Journal.

[2] Laura Board (August 12, 2016). ‘Eurozone Second-Quarter GDP Growth Halves, as Expected, to 0.3%.” The Street.

[3] Nicholas Megaw (October 14, 2016). “Eurozone trade surplus beats expectations.” Financial Times.

[4] European Central Bank (May 2016). Financial Stability Review.

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