For July
Provided by: EuroStat
Official Release: PDF

PPI y/y: 9.0%, forecast 9.1%, pr 8.0% (Jun), 7.1% (May), 6.1% (Apr),
5.8% (Mar)

European producer prices continued to increase in July, with the monthly rate up 1.1%, and the annual rate hitting a new record (series goes back 18 years) at 9.0%. Core prices were up an annual rate of 4.3%, compared to 4.0% in June. Crude oil was a main factor for the increase, it had climbed to its all time high near $147 at the start of July, though eased substantially in the latter part of the month. As other data around the world points out, inflation peaked in July and has eased in August. The ECB does not have plans to ease interest rates when it meets on Thursday morning, even though growth is slowing. It will be some time yet before the bank is comfortable with the rate of inflation.   

From the Release: "In July 2008 compared with June 2008, the industrial producer price index1 rose by 1.1% in the euro area2 (EA15) and by 0.9% in the EU272. In June3, prices increased by 1.0% and 1.4% respectively. In July 2008 compared with July 2007, industrial producer prices gained 9.0% in the euro area and 11.0% in the EU27."

The EUR/USD slid 100 pips overnight, to a fresh 6-month low. The 5 AM EST release stopped the main thrust of the fall, and the pair has been consolidating around the 1.45 level since.

For July
Provided by: Eurostat
Official Release: PDF

Retail Sales y/y: -2.8%, forecast -2.1%, pr. -3.2% r (Jun), 0.2% (May),
-2.9% (Apr)

Retail sales in the Euro-zone for the July period disappointed forecasts. Sales fell 0.4% for the month, and June's figure was revised down to show a 0.9% fall. On the year, sales were down 2.8% and June's figure was revised down to a record fall of 3.2%. Sales of food, drinks and tobacco dropped 0.9% on the month, while sales of non-food products eased 0.1%. Consumers have responded swiftly to the deteriorating conditions (credit crunch and high oil and food prices) that have afflicted the Euro-zone economy in the 2nd quarter, and to start the 3rd. GDP growth in the 2nd quarter decreased 0.2%.

The Euro fell to a new seven-month low against the Dollar, touching 1.4400.

Provided by: European Central Bank
Official Decision: Press Release
Official Release: Introductory Statement

The ECB kept interest rates at 4.25% in a bid to fight inflation even as the euro-region teeters on the brink of recession. Policy members continue to be concerned about inflation to wages and seems to have keep the same biases as in their meeting last month. Limiting second-round effects has been a consistent message from the ECB in recent months. Consumer inflation eased to 3.8% in August from a 16-year high of 4% in July, but that figure is still far above the ECB's target of 2%.

The EUR/USD had been climbing overnight, and reached an session high near 1.4545. It fell following the release, and was wavering back and forth as Trichet held his press conference.

From the Release: "To sum up, a cross-check of the outcome of the economic analysis with that of the monetary analysis clearly confirms the assessment of upside risks to price stability over the medium term. The information that has become available since the last meeting of the Governing Council has confirmed that annual inflation rates are likely to remain well above levels consistent with price stability for a protracted period of time. The growth of broad money and credit aggregates is now showing some signs of moderation, but the still strong underlying pace of monetary expansion points to continued risks to price stability over the medium term. The latest economic data also confirm the weakening of real GDP growth in mid-2008. This reflects partly an expected technical reaction to the strong growth seen in the first quarter as well as dampening effects from global and domestic factors, including direct and indirect effects from high commodity prices. Against this background, it remains imperative to avoid broad-based second-round effects in wage and price-setting. In full accordance with our mandate, we emphasise that maintaining price stability in the medium term is our primary objective and that we are resolute in our determination to keep medium and long-term inflation expectations firmly anchored in line with price stability, thereby preserving purchasing power in the medium term and supporting sustainable growth and employment in the euro area. On the basis of our assessment, the current monetary policy stance will contribute to achieving our objective. We will continue to monitor very closely all developments over the period ahead."

For September
Provided by: Sentix

The Sentix investor confidence index deteriorated to -20.2 for September, a fall of almost 5 points and the worst overall level in more than 5 years. The current conditions sub-gauge led the declined dropping to -12.0 from 0.0 in August. The measure of expectations for the next six month edged up to -28.0 from -29.5. The Sentix index is seen as a bellwether for the ZEW institute's gauge of German investor sentiment. Investors are concerned that the Euro-zone is in facing recessionary conditions. The 2nd quarter saw negative GDP growth and with data so far for the 3rd quarter not being very encouraging, it is a real possibility.

• EUR/USD - Euro Hits New 11-Month Low vs Dollar: The Euro-Dollar opened higher and rose to test above 1.44, but fell rather sharply in the European session. The Euro slid 350 pips from that high to trade near 1.4050 by 2 PM EST which is a fresh 11-month low.

  

For September
Provided by: European Central Bank
Official Release: PDF

From the Release:

On Inflation: 

"Euro area HICP infl ation was 4.0% in June and July 2008 and, according to Eurostat’s flash estimate, 3.8% in August. This worrying level of infl ation is largely the result of both the direct and indirect effects of past surges in energy and food prices at the global level. Moreover, wage growth has been picking up in recent quarters, at a time when labour productivity growth has decelerated, resulting in sharp increases in unit labour costs. Looking ahead, on the basis of current futures prices for commodities, the annual HICP infl ation rate is likely to remain well above levels consistent with price stability for quite some time, moderating only gradually during the course of 2009. According to the latest ECB staff macroeconomic projections, average annual HICP infl ation is projected to be between 3.4% and 3.6% in 2008 and between 2.3% and 2.9% in 2009. The higher infl ation projections for 2008 and 2009 mainly refl ect higher energy prices and, to a lesser extent, higher food and services prices than assumed previously. Risks to price stability at the policy-relevant medium-term horizon are on the upside. These risks include the possibility of renewed increases in commodity prices and of previous rises having further and stronger indirect effects on consumer prices. There is particularly a very strong concern that the emergence of broad-based second-round effects in price and wage-setting behaviour could add signifi cantly to infl ationary pressures. Moreover, the upside risks to price stability could be aggravated by unexpected rises in indirect taxes and administered prices." 

On Growth:

"Following GDP quarterly growth of 0.7% in the fi rst quarter of 2008, euro area real GDP contracted by 0.2% in the second quarter, as consumption declined and investment weakened. The euro area economy is currently experiencing an episode of weak activity characterised by high commodity prices weighing on consumer confi dence and demand, as well as by dampened investment growth. Looking ahead, a gradual economic recovery is expected. The September 2008 ECB staff macroeconomic projections for the euro area forecast annual real GDP growth in a range between 1.1% and 1.7% in 2008 and between 0.6% and 1.8% in 2009. However, uncertainty surrounding this outlook is high and downside risks prevail."

For 2nd Quarter
Provided by: EuroStat
Official Release: PDF

Employment Change y/y: 1.2%, pr. 1.6% (1Q) 

From the Release: "The number of persons employed in the euro area (EA15) rose by 0.2% (283 000 persons) in the second quarter of 2008 compared with the previous quarter. Compared with the same quarter of the previous year, employment grew by 1.2% in the euro area in the EU27 in the second quarter of 2008, after +1.6% in the first quarter of 2008." 

Final Version for August
Provided by: EuroStat
Official Release: PDF

CPI m/m: -0.1%, forecast -0.2%, pr. -0.2%

The pace of annual consumer inflation in the Euro-zone fell to 3.8% in August compared to July's 4%. That figure matched the preliminary forecast. On the month prices were down 0.1%, which was higher than the preliminary release which had showed a 0.2% decline. With oil prices easing, energy costs are receding. It remains to be seen if the recent sharp drop in oil prices is temporary or will be more persistent. Energy-price inflation eased to 14.6 percent in August from 17.1 percent in July, today's EU report showed. The concern of the ECB now, is to limit and second-round effects to inflation, mainly a wage-spiral that can fuel underlying inflation. German inflation slowed to 3.3% in August from 3.5% in July, while the UK saw its annual rate rise to 4.7%, which is the fastest in 11 years. 

From the Release: "Euro area annual inflation was 3.8% in August 2008, down from 4.0% in July. A year earlier the rate was 1.7%. Monthly inflation was -0.1% in August 2008.

Euro area annual inflation was 3.8% in August 20082, down from 4.0% in July. A year earlier the rate was 1.7%. Monthly inflation was -0.1% in August 2008.

The main components with the highest monthly rates were clothing (1.6%), hotels & restaurants (0.4%), household equipment and recreation & culture (both 0.2%), and the lowest were transport (-1.3%), education (-0.5%) and food (-0.4%)."

For July (s.a.)
Provided by: EuroStat
Official Release: PDF

Trade Balance n.s.a.: -€2.3B, forecast -€3.0B, pr. -€0.2B (Jun), -€4.6B (May), €2.3B (Apr)
Exports: 3.7%, pr. 1.4% (Jun)
Imports: 5.8%, pr. 2.9% (Jun)

The Euro-area trade deficit widened in July as the increase in exports was overshadowed by a higher import bill. The non-seasonally adjusted trade deficit grew to €2.3 billion in July from €0.2B in in June. On a seasonally adjusted basis, the deficit was at €6.4B.

From the Release: "The first estimate for the euro area (EA15) trade balance with the rest of the world in July 2008 gave a 2.3 bn euro deficit, compared with +5.0 bn in July 2007. The June 2008 balance was -0.2 bn, compared with +7.5 bn in June 2007. In July 2008 compared with June 2008, seasonally adjusted exports rose by 3.7% and imports by 5.8%." 

Preliminary Version for September

For September
Provided by: European Commission Economic and Financial Affairs
Official Release: (PDF)

The European Commission's measure of consumer confidence a component within its Economic Sentiment Indicator (ESI), remained unchanged at -19 for the Euro Area. after easing for the first time in a year in August, edging up to -19 from July's -20. However, in September, other components of the ESI continued their slide; industry at -19 from -9, services at 0 from 1, construction at -16 from -13, with retail trade the lone gainer at -8 from -10.

For September
Provided by: European Commission
Official Release: PDF (Save Link As...)

From the Release: " The Business Climate Indicator (BCI) for the euro area decreased significantly to values last observed in 2003. The low level of the indicator suggests that industrial activity remains subdued.

Four out of five underlying components of the BCI declined. The decline was fairly sharp for managers' assessment of production trend observed in recent months, total order books and export order books; while their assessment of stocks of finished products worsened only slightly and production expectations remained unchanged."