Article / 12 June 2013 at 4:49 GMT

3 Numbers to Watch: German CPI, UK jobs, EU industrial production

editor/analyst /
United States

Wednesday is expected to bring some encouraging economic news for Britain and the Eurozone. First, today’s update on consumer prices in Germany will likely confirm that the disinflation risk was lower last month. Meanwhile, economists think that the UK will again report a drop in the number of workers claiming unemployment benefit. Also, industrial output for the EU is projected to post its third consecutive monthly rise in today's April release.

Germany Consumer Price Index (06:00 GMT): The annual rate of consumer inflation is no longer sliding, according to the preliminary estimate for May, the Federal Statistics Bureau reported late last month. Today’s second estimate is expected to confirm that disinflation's recent momentum reversed course. That’s a good sign, given the state of macro in Europe. The recession risk is still low in Germany, but its growth of late has been sluggish. Disinflationary winds aren't so easy to ignore when so many of the surrounding economies are stagnating if not contracting. The persistent deceleration in German inflation this year suggested that the Eurozone's malaise was spilling over the border. But the initial numbers for May now suggest otherwise.

Consumer prices are expected to increase by an annualized 1.5 percent through May, the government previously advised. At least one consensus forecast sees today’s revision to the preliminary estimate going even higher: 1.7 percent. Disinflation risk, in other words, is no longer a clear and present danger for Germany, even if the hazard still lurks elsewhere in the Eurozone.


UK Labour Market Report (08:30 GMT): Britain’s economy is enjoying a run of upbeat economic reports lately. Yesterday’s slightly better-than-expected update on industrial production for April is the latest example, and today’s release on the labour market data for May will probably extend the positive trend.

Although the unemployment rate is expected to remain unchanged, economists think that the claimant count for May will decline again. If so, that will mark the seventh straight month with fewer workers claiming jobless benefits. Growth is hardly robust in Britain, but the persistent drop in the claimant count makes a strong case for thinking that economy will remain on the mend. That’s also the message in the latest GDP estimate for the UK from the National Institute of Economic and Social Research (NIESR). “Our monthly estimates of GDP suggest that output grew by 0.6 percent in the three months ending in May after growth of one per cent in the three months ending in April 2013,” the group reported. The pace of expansion remains modest, but the overall direction looks promising and today's labour market news isn't likely to challenge that view.


EU Industrial Production (09:00 GMT): The market will be closely watching today’s April update on industrial output. In the previous release, the numbers held out the possibility that the sector was stabilising. That’s still a speculative view, although today’s report may further minimise the uncertainty for thinking positively.

The bad news is that the best-case scenario continues to rely on a wobbly set of data. March’s one percent surge in industrial production versus February is certainly impressive, but one month doesn’t tell us much. Indeed, even after March’s gain, the annual pace of industrial output for the Eurozone remains deeply negative. But here too the possibility of brighter days ahead looks tantalisingly plausible as the red ink for the year-over-year comparison inches closer to zero. Today’s numbers may bring us even closer to neutral. The consensus forecast anticipates a modest monthly gain for EU industrial output. If the prediction holds, that’ll make three monthly increases in a row.  



The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Show latest activity
Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail