However, the main market movers for euro, on Monday, were results of German elections. Angela Merkel won a fourth term as German chancellor in a victory that was marred by the hollowing out of support for the two main parties and a surge for the populist AfD in a clear rebuke to her open-doors refugee policy. Merkel’s Christian Democrat-led bloc and her main challenger, Martin Schulz’s Social Democrats, plunged to historic lows as votes flowed to the anti-immigration Alternative for Germany, or AfD, in a sign of the growing polarization in Europe’s biggest economy.
Wednesday's session brought M3 Money Supply figures. The annual growth rate of the broad monetary aggregate M3 increased to 5.0% in August 2017, from 4.5% in July, averaging 4.8% in the three months up to August. The components of M3 showed the following developments. The annual growth rate of the narrower aggregate, including currency in circulation and overnight deposits (M1), increased to 9.5% in August, from 9.1% in July. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) was less negative at -2.7% in August, from -3.2% in July.
Thursday was marked by German and Spanish CPI figures. The inflation rate in Germany as measured by the consumer price index is expected to be 1.8% in September 2017. Based on the results available so far, the Federal Statistical Office (Destatis) also reports that the consumer prices are expected to increase by 0.1% on August 2017. In September 2017, the harmonised index of consumer prices for Germany, which is calculated for European purposes, is expected to increase by 1.8% year on year and to remain unchanged on August 2017.
The estimated annual inflation of the CPI in September 2017 is 1.8%, according to the an advance indicator prepared by INE. This indicator provides an advance of the CPI which, if confirmed, would increase of two tenths in its annual rate, since in the month of August this variation was of 1.6%. In this behavior, the rise in food and non-food prices alcoholic beverages, which declined in 2016. On the other hand, the annual variation of the leading indicator of the HICP the 1.9%. If this data is confirmed, the annual rate of the HICP would decrease by one tenth last month.
From Eurozone, on Friday, CPI figures were published. Euro area annual inflation is expected to be 1.5% in September 2017, stable compared to August 2017, according to a flash estimate from Eurostat, the statistical office of the European Union. Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in September (3.9%, compared with 4.0% in August), followed by food, alcohol & tobacco (1.9%, compared with 1.4% in August), services (1.5%, compared with 1.6% in August) and non-energy industrial goods (0.5%, stable compared with August).
This week markets will be looking at:
Spanish Manufacturing PMI (Monday 9:15)
Italian Manufacturing PMI (Monday 9:45)
PPI (Tuesday 11:00)
Retail Sales (Wednesday 11:00)
