The composite nature of the Eurozone means that there are many different types of economic climates combining to produce any headline figures. As such, sometimes the facts can be misleading when data from all the countries is grouped together to produce one number which describes the European economic situation. Because of this, analysts tend not to put too much emphasis on headline European numbers apart from the most important ones such as CPI, PPI, GDP, trade balance and retail sales. The German and French economies are the largest in the Eurozone and are relied on to drive economic growth. If things are not good in Germany or France, then this is likely to have an effect on the overall economic performance in the Eurozone. Thus, the data coming out from these countries in particular are viewed in almost as equal importance as that of the Eurozone as a whole.
- Zew Survey
- Eurozone Unemployment
- Eurozone Retail Sales
- Consumer Price Index (CPI)
- Gross Domestic Product (GDP)
Name: ZEW Survey www.zew.de/en
Briefly: Survey conducted throughout Europe, querying financial and economic experts to make a medium term forecast about Germanys economic situation. There are three parts to the survey, German Indicator of Consumer Sentiment, German Indicator of Current Situation and Euro-zone Indicator of Economic Sentiment.
Source: Center for European Economic Research
Frequency: Monthly
Released: First half of the month, usually on Tuesday, 9am CET.
Market impact: High - tends to move markets. One of the most important data releases in the European cycle.
Notes: The Ifo indicator is usually released a few days before the ZEW and is used as an estimate of what the ZEW will actually be. Therefore market movements might only occur if the ZEW is sharply different from this.
Name: Euro Zone Unemployment ec.europa.eu/eurostat
Briefly: The unemployment rate is the number of people unemployed as a percentage of the labour force. The labour force is the total number of people employed and unemployed. The numbers of unemployed and the monthly unemployment rate are estimates based on results of the European Union Labour Force Survey which is a household survey carried out in all countries on the basis of agreed definitions. These results are interpolated/ extrapolated to monthly data using national survey data and national monthly series on registered unemployment.
Source: Eurostat
Frequency: Monthly
Released: 9am
Market impact: Moderate.
Name: Euro Zone Retail Trade
Briefly: This report is used to indicate consumer confidence and consumer spending. It is the sum of the value of all goods and services sold at retail outlets in the Eurozone. It is a %, the change from the previous month.
Source: Eurostat
Frequency: Monthly
Released: 9am
Market impact: Moderate. Poor retail sales can mean consumers are struggling with personal finances, which may be the result of a number of things. A low figure is a bad sign for the economy since growth and output may be lower as a result of a strapped consumer.
Name: CPI (Consumer Price Index)
Briefly: The CPI is the most commonly used method of measuring price inflation - that is the change in the cost of living. Inflation means that the purchasing power of the euro is falling. In a stable economy, this is offset by individuals receiving interest payments on their savings. Thus the relationship between inflation and interest rates is an important one. CPI tracks the changes in the prices of a basket of goods that represents the typical Eurozone household expenses such as food, energy, housing, clothing, transportation, medical care, entertainment and education. The CPI ex-food and energy is also released at the same time and this often provides a cleaner indication of inflation since it removes some categories which may be affected by external shocks such as high oil prices.
Frequency: Monthly
Market impact: High. The mandate of the European Central Bank is to ensure price stability and this means keeping inflation under control. The ECB monetary council will increase rates as necessary if inflation rises above their comfort zone and they will keep raising rates in order to maintain this stability. Any changes in the CPI can therefore provide a good indication of future monetary policy.
Name: Gross Domestic Product (GDP)
Briefly: Measures the overall growth of the economy, reported in % terms.
Market impact: Moderate. Much of the data has already been released by the time GDP actually comes out and so estimates are usually quite accurate. However, unexpected changes do occur regularly and can have an impact on both currency and equity markets. Higher than expected figures can signal a stronger economy and thus may indicate a need for higher interest rates, thus inducing strength in the euro and may send equity markets downward in the short term. However growth is usually a good sign for an economy and will, in the longer term, have a positive effect on equity markets.
Notes: French GDP is released quarterly, German is annually and the Eurozone figure is released quarterly, about two months after the end of the quarter.