3 numbers to watch: EZ Ind. Prod., US PPI & Retail Sales

A ramp up in economic reports is on the cards today as the US is set to release both PPI and Retail Sales among others while the beleaguered Eurozone will offer us (what is left of) Industrial Production. Let's jump straight to the three numbers.

• Apr. Eurozone Industrial Production (09:00 GMT) to decline steeply? The surveys have been screaming 'contraction' in the manufacturing sector for several months now.  Indeed, the last +50 reading in the Eurozone PMI Manufacturing Index was back in July 2011. Today's Eurozone Industrial Production figure looks set to follow that trend, with consensus predicting a steep 1.2% m/m deterioration (2.7% y/y) after a smaller 0.3% decline in March. Industrial Production is now 3.6% below the cyclical peak in August of last year and a massive 11% from the pre-Global Recession peak (the US for comparison is 3.3% below its 2007-peak).

• May US Producer Price Index (12:30) to move closer to deflation: Prices at the producer level have been decelerating for almost a year after reaching a cyclical peak of 7.1% y/y in July 2011, as weaker growth and lower commodity prices make their mark. This trend is set to continue and we may soon see a move below 0%. Consensus looks for much the same with a prediction of 1.2% y/y from 1.9%, or -0.6% m/m while the less volatile core index is set to move up 0.2% m/m or 2.8% y/y. The divergence of the two series underlines the impact of energy as the latter does not include energy prices.

• May US Retail Sales (12:30) to be hurt by weak auto sales? Sales of vehicles dropped 4.5% m/m in May (3.3% for domestic sales), which is expected to impact overall Retail Sales enough for a flat reading, despite robust sales elsewhere (the Retail Sales less Autos series is expected to improve by 0.4%). Despite the weakness in April - Retail Sales only rose 0.1% m/m - the annual growth rate remains at a respectable 6.4% and is not expected to change in case of a flat month-on-month reading, as May 2011 was also a weak month.

You can choose to be notified whenever there's a new 3 Numbers to Watch piece if you become a TradingFloor member - it's free, and you can sign in with Twitter, Facebook, Google or LinkedIn.  You can also follow all the news from our macro team on our Macro Page.