According to analysts from Danske Bank, German industrial production for March to be released next week should give more clues as to the state of European industry. Also, the EU Commission will publish new forecasts.
Key Quotes:
“In the euro area, the EU commission will publish its Spring economic forecasts for the 27 member states on Tuesday. We will especially monitor the updated fiscal forecasts for France and Italy. On the back of the ‘grande debate’ President Macron recently announced his plans for both tax cuts and higher pensions which will likely push the 2019 deficit above 3% of GDP.
“Markets will probably pay particularly close attention to the Italian forecasts. After the government eased fiscal policy significantly this year and in light of weaker growth, the projection is likely to confirm that a reduction in the 132% of GDP public debt burden remains an elusive goal. Another fiscal rebuke from the Commission could well bring back fears in the market of the Italian budget fight reigniting in the autumn.”
“In Germany, we get the March industrial production print on Wednesday, which will give us the last piece of information on where German Q1 growth is heading. The German industrial sector has been at the epicentre of the euro area slowdown and PMIs still paint a dismal picture of the manufacturing sector. After tanking in H2 18, industrial production has rebounded slightly over the last months and we see scope for further stabilisation in the March print.”
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