MARKET MOVER - BNP PARIBAS - Investment Services India
MARKET MOVER - BNP PARIBAS - Investment Services India
MARKET MOVER - BNP PARIBAS - Investment Services India
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
Key Data Preview<br />
120<br />
115<br />
110<br />
105<br />
100<br />
95<br />
90<br />
85<br />
80<br />
Chart 1: German Ifo Business Climate<br />
Expectations (4-Mth Lag)<br />
Current Conditions<br />
75<br />
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10<br />
Source: Reuters EcoWin Pro<br />
Sep (f) Aug Jul Jun<br />
Headline 106.7 106.7 106.2 101.8<br />
Expectations 104.2 105.2 105.6 102.5<br />
Current Conditions 109.2 108.2 106.8 101.2<br />
Key Point:<br />
Ifo’s business climate index remains very strong but<br />
expectations are likely to moderate given evidence of<br />
weaker external growth.<br />
<strong>BNP</strong> Paribas Forecast: Cooling Expectations<br />
Germany: Ifo Business Climate (September)<br />
Release Date: Friday 24 September<br />
Ifo’s business climate index rose to its highest level in over<br />
three years in August, propelled by the strength of the subindex<br />
measuring current business conditions.<br />
The latter rose by a cumulative eighteen points in the six<br />
months to August, the strongest run of data in the history of<br />
the series since unification.<br />
This strength largely reflects the exceptional strength in the<br />
manufacturing and export sectors, though domestic sectors<br />
including retail have also shown a marked improvement in<br />
recent months.<br />
As the chart shows, the current assessment is still several<br />
points below its high in the previous expansion, implying<br />
further upside potential, though recent ’hard’ data such as<br />
industrial output, manufacturing orders and exports have<br />
shown signs of weakening.<br />
Given the evidence of a moderation in activity in some of<br />
Germany’s most important markets, including the US and<br />
China, Ifo’s survey of future expectations is likely to top out<br />
in the period ahead.<br />
Net, we expect Ifo’s business climate index to go sideways<br />
in September, though given the external backdrop, we look<br />
for a moderation in the subsequent months.<br />
0.6<br />
0.5<br />
0.4<br />
0.3<br />
0.2<br />
0.1<br />
0.0<br />
-0.1<br />
-0.2<br />
-0.3<br />
-0.4<br />
-0.5<br />
Chart 2: France Job Seekers<br />
01 02 03 04 05 06 07 08 09 10<br />
Source: Reuters EcoWin Pro<br />
Unemployment Rate<br />
(3-m change, percentage points)<br />
Job Seekers (3m change, thousands, RHS)<br />
200<br />
150<br />
100<br />
50<br />
0<br />
-50<br />
-100<br />
-150<br />
SA Aug (f) Jul Jun Aug 09<br />
Job Seekers m/m k 0.0 -14.4 -8.6 28.6<br />
Job Seekers y/y % 4.2 5.4 6.9 26.0<br />
Key Point:<br />
The trend has changed from rising to declining, but<br />
the August figure may blip slightly higher.<br />
<strong>BNP</strong> Paribas Forecast: Stable<br />
France: Job Seekers (August)<br />
Release Date: Friday 24 September<br />
In the last two months, the number of job seekers has<br />
dropped; this represents a reversal in the unemployment<br />
trend. However, the decline has been moderate and, since<br />
it is recent, another month of increase cannot be ruled out.<br />
August is a particular month in that a significant number of<br />
seasonal jobs in the tourism activity can be subject to early<br />
ending because of adverse weather. The level of industrial<br />
activity is also still weak in absolute terms so the need for<br />
temps to replace workers on holidays is less acute. Since<br />
the number of job seekers is adjusted in accordance with<br />
the usual seasonal pattern, we have forecast the number of<br />
unemployed people to remain steady in August.<br />
Nevertheless, the underlying trend has now switched from<br />
the increase that prevailed since Q2 2008 to a modest<br />
decline.<br />
The unemployment rate reported by Eurostat has not<br />
declined yet but we expect this to occur very soon –<br />
probably in the figure for August – unless the summer<br />
months (June and July) are revised down from the present<br />
estimate of 10.0%. The Eurostat figure will be released on<br />
1 October.<br />
Market Economics 23 September 2010<br />
Market Mover<br />
www.GlobalMarkets.bnpparibas.com<br />
54