(MENAFN– ecpulse) Market consensus is looking for an improving inflation and unemployment numbers from the Euro zone – a sign the 18-nation economy could be stabilizing through the first half of this year.
Just days before the European Central Bank’s (ECB) policymakers meet in Frankfurt, the European statistics office, Euro stat, is expected to deliver a positive numbers for both July CPI inflation estimate and June unemployment rate. The forecast came as follows:
- April flash CPI estimates probably edged higher to 0.8% from 0.5%
- April core CPI likely edged higher to 1.0% after falling to 0.7%
As for jobs data:
- Unemployment rate expected to remain unchanged at 6.7%
- Unemployment change likely fell 10,000 from 12,000 decline
The intolerable surge in jobless rates in the euro-area is becoming the major challenge for European economies against a strong recovery. Consumer spending remains weak and so the layoffs are becoming more evident across the major sectors amid the growing budget cuts as part of bailout program, requested by some euro members, like Portugal and Greece.
Inflation, on the other hand, is expected to show consumer prices rose to 0.8 percent in the year ended April from 0.5 percent March. Core inflation data expected to rise to 1.0 percent after 0.7 percent a year ago.
-data inflation germany
This may ease the pressure from the ECB to loosen policy further and will be closely watched by investors, and may also provide support for the Euro if increasing tensions from the Ukraine don’t continue to weigh on price movement.
Given the ECB’s unease with the low inflation, if the actual increase would fall short of the consensus, the risks for a short-term rate cut will increase. While in case consensus is confirmed or inflation exceeds consensus, rate cut expectations should fade.
As of 08:40 GMT, EUR/USD was little changed at 1.3801, after hitting an intraday high of 1.3814 and low of 1.3800.
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