/ 13 May 2013

Economic week ahead: European growth updates

Statistics South Africa will release March's retail sales figures on Wednesday.
Statistics South Africa will release March's retail sales figures on Wednesday.

North America
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The United States's data week will kick off with last month's retail sales figures on Monday. Economists surveyed by Bloomberg expect the data to show that consumer purchases fell 0.3% on a monthly basis following a 0.4% decline in March.

Last month's industrial production figures will follow on Wednesday along with the first of two inflation updates scheduled for the week. Consensus is that industrial output declined 0.2% on a monthly basis in April following March's 0.4% growth. Wednesday's producer price index (PPI) data is expected to show that prices at the factory gate fell 0.7%, month on month, in April.

Consumer price index (CPI) data, which will follow on Thursday, is expected to show that consumer price pressures are subdued and well below the central bank's target. CPI likely declined 0.3% in April following March's 0.2% decline. Less food and energy, prices probably rose 0.2% in April, up slightly from March's 0.1% rise.

In addition to this week's economic data releases, investors will be watching for earnings results from the world's biggest retailer, Walmart. Markets will be watching to see if the recent hike in payroll taxes enacted in the US hurt the company's sales.

Europe
Eurostat will release the euro zone's latest industrial production figures and Germany's Zentrum für Europäische Wirtschaftsforschung (ZEW) will report its closely watched economic sentiment index on Tuesday morning.

Analysts expect March's output figures to show that production in the 17-member currency bloc rose 0.5%, on a monthly basis, a slight improvement on February's greater than expected 0.4% rise. ZEW's economic sentiment index is likely to show that German investor confidence picked up slightly this month after slipping in April.

Later on Tuesday, Europe's two largest economies, Germany and France, will report first quarter growth figures. Economists expect Germany's gross domestic product (GDP) to have expanded by 0.3% on a quarterly basis and by a mere 0.2% from a year earlier. France's economy likely contracted 0.1%, quarter on quarter, and by 0.4%, year on year.

Growth figures for the euro zone as a whole will follow on Wednesday. The first estimate of first quarter GDP is likely to confirm that the currency bloc remained mired in recession during the first three months of the year. Consensus is that GDP shrank for the sixth consecutive quarter – by 0.1% on a quarterly basis – but by less than the final quarter of 2012's 0.6% contraction.

Asia
China – the world's second biggest economy – released industrial production, retail sales and urban fixed asset investment figures this morning.

Elsewhere in the region, the Bank of Indonesia will announce its latest monetary policy decision on Tuesday. Economists expect policymakers in to leave the central bank's overnight rate on hold at 5.75%.

Also on Tuesday, the Bank of Japan will release its latest corporate goods price index (CGPI). Analysts surveyed by Market News International expect this measure of producer inflation to show a 13th consecutive drop, likely having fallen 0.2% in April after March's 0.5% decline.

Japan will release first quarter growth figures on Thursday. Analysts expect GDP growth of 0.7%, an improvement on the previous quarter's zero growth, following recent monetary and fiscal stimulus programmes by the country's central bank and government.

Closing out the week, Japan's Cabinet Office will release March's core private sector machinery orders, a leading indicator for capital spending. Analysts expect core orders – which excludes the more volatile demand created by electric utilities and ships – to have risen 3% in March, down from 7.5% in February.

Middle East and Africa
Statistics South Africa will release March's retail sales figures on Wednesday. Economists expect sales growth to have accelerated to a six-month high of 4.1% in March from a year earlier, up from 3.8% year on year growth in February. March's wholesale trade, civil cases for debt and motor trade figures will follow from the agency on Thursday.

On Thursday, Israel will release preliminary first quarter growth figures. Markets expect the data to show that the country's economy expanded by 2.8% in the first quarter of 2013, an improvement on the 2.6% expansion observed in the final quarter of 2012. Israel's economy expanded 3.2% in 2012 as a whole, the fastest rate of expansion among the 34-member countries of the Organisation for Economic Co-operation and Development (OECD).

Elsewhere in the region, Ghana is expected to release March's gross reserves figures this week and to provide April's consumer price index (CPI) readings. Consumer inflation updates are also expected from Namibia, Zimbabwe and Tanzania. The latter may also release March's M3 money supply figures this week or early next.

Matt Quigley writes the Mail & Guardian's weekly economic preview. You can follow him on Twitter at @mattquigley.