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5 Jan 2016
Downside risks to Eurozone inflation and UK construction PMI - TDS
FXStreet (Delhi) – Research Team at TDS, sees downside risks to euro area HICP inflation in December, following disappointment in the German and Spanish readings in recent days (and a flat Belgium CPI).
Key Quotes
“Market consensus is calling for an increase from November’s 0.2% y/y to 0.4% y/y in December, but we think a 0.3% y/y is most likely, with some small downside risks even to that.
UK: We see downside risks to the construction PMI, with a decline to 54.8 versus market expectations of an increase to 56.0. Decelerating activity in the manufacturing sector is likely to have spilled over into the sector last month, more than counteracting a small positive impact on construction from gains in house prices.
NOK: We see the Norwegian manufacturing PMI remaining well in contraction territory in December, with a repeat of November’s 47.6 print (no consensus available). The depreciation of NOK in December should eventually provide some small support to the sector, but we don’t see this happening until into the new year, and even then, the broader negative effects of lower oil prices are expected to dominate, holding manufacturing activity in weak territory for some time to come.”
Key Quotes
“Market consensus is calling for an increase from November’s 0.2% y/y to 0.4% y/y in December, but we think a 0.3% y/y is most likely, with some small downside risks even to that.
UK: We see downside risks to the construction PMI, with a decline to 54.8 versus market expectations of an increase to 56.0. Decelerating activity in the manufacturing sector is likely to have spilled over into the sector last month, more than counteracting a small positive impact on construction from gains in house prices.
NOK: We see the Norwegian manufacturing PMI remaining well in contraction territory in December, with a repeat of November’s 47.6 print (no consensus available). The depreciation of NOK in December should eventually provide some small support to the sector, but we don’t see this happening until into the new year, and even then, the broader negative effects of lower oil prices are expected to dominate, holding manufacturing activity in weak territory for some time to come.”