MARKET MOVER - BNP PARIBAS - Investment Services India
MARKET MOVER - BNP PARIBAS - Investment Services India
MARKET MOVER - BNP PARIBAS - Investment Services India
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Key Data Preview<br />
10<br />
5<br />
0<br />
-5<br />
-10<br />
-15<br />
-20<br />
-25<br />
-30<br />
-35<br />
Chart 9: Eurozone Sentiment by Sector<br />
Consumer<br />
Industry<br />
-40<br />
91 92 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 />
Economic Sentiment 101.5 101.8 101.1 98.9<br />
Industry -5 -4 -4 -6<br />
<strong>Services</strong> 7 7 7 4<br />
Consumer -11 -11 -14 -17<br />
Key Point:<br />
The economic sentiment index is likely to remain<br />
elevated but a moderation in the industrial sector is<br />
forecast, in line with other survey data.<br />
<strong>BNP</strong> Paribas Forecast: Topping Out<br />
Eurozone: Economic Sentiment (September)<br />
Release Date: Wednesday 29 September<br />
The eurozone economic sentiment index improved in five<br />
of the six months to August, reaching its highest level since<br />
March 2008. The pick-up in sentiment has also been more<br />
broad based over recent months.<br />
The key driver of the improvement in sentiment early in the<br />
expansion was industrial sentiment, which has the highest<br />
weighting of the five main sub-sectors (at 40% of the total).<br />
The moderation of other leading indicators for the industrial<br />
sector, however, including the PMI for manufacturing, is<br />
indicative of industrial sentiment losing ground in coming<br />
months against a backdrop of slowing global growth.<br />
Having lagged during the initial stages of the recovery, the<br />
domestically driven sentiment sub-surveys, such as those<br />
for the services and retail sectors, have improved markedly<br />
over the summer months. The improvement in these areas<br />
has been most pronounced in Germany, which is linked to<br />
the relative strength of its labour market.<br />
Preliminary September figures for the eurozone, however,<br />
showed consumer sentiment flat at -11, the first month in<br />
four not to show an improvement.<br />
Surveys of price expectations in the household sector have<br />
risen sharply from 2009’s lows, as have pricing intentions<br />
of industrial firms, but they remain well below past peaks.<br />
Net balance<br />
40<br />
30<br />
20<br />
10<br />
0<br />
-10<br />
-20<br />
-30<br />
-40<br />
-50<br />
Chart 10: French Hh Confidence<br />
Good Time to Save<br />
Good Time to Spend<br />
Headline Index<br />
03 04 05 06 07 08 09 10<br />
Source: Reuters EcoWin Pro<br />
Diffusion Index,<br />
SA Sep (f) Aug Jul Sep 09<br />
INSEE indices:<br />
Overall -39 n.a. -39 -35<br />
Buying opportunity -22 n.a. -24 -26<br />
EU Commis. Index:<br />
Headline -20.0 -18.2 -22.3 -24.4<br />
Key Point:<br />
Economic developments are favourable, but the<br />
political context is highly adverse.<br />
<strong>BNP</strong> Paribas Forecast: Stable<br />
France: Household Confidence (September)<br />
Release Date: Wednesday 29 September<br />
As usual no survey is carried out in August, so the<br />
September results will be compared to July’s.<br />
Over the summer, inflation eased. Petroleum product<br />
prices, to which consumers pay special attention, declined.<br />
Employment rose in 0.2% q/q in Q2 with Q3 probably also<br />
seeing an increase. That resulted in a slight decline in the<br />
number of job seekers. Although households will not feel<br />
this easing, they probably understood that some<br />
improvement has occurred in the labour market. Overall,<br />
economic trends are positive for confidence but politics are<br />
clearly adverse.<br />
In terms of political developments, we saw a slight recovery<br />
of the president and prime Minister in the polls over the<br />
summer, but this move has now reversed. The massive<br />
demonstrations on 7 September show how concerned the<br />
public is about the pension reform and more generally<br />
about its standard of living.<br />
As a result, we forecast the headline confidence index to<br />
be unchanged although the opportunity to make important<br />
purchases should have improved slightly. Since the<br />
savings ratio trend is key for future consumption, it will also<br />
be of interest to see whether the recent divergence<br />
between the willingness and the ability to save persists.<br />
Market Economics 23 September 2010<br />
Market Mover<br />
www.GlobalMarkets.bnpparibas.com<br />
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