Europe economic review weekly (Oct. 19, 2015)

Fear about deteriorating vs. somewhat solid consumption (and current earnings path?)

1. EMU IP Clings to Growth But Decelerates

EMU industrial production excluding construction (IPxC) fell by 0.5% in August after a 0.8% increase in July.
Manufacturing IP fell by 0.3% and is weaker over three months falling at a 1% annualized pace.

2. France Shows Trade Flow Reversal

3. ZEW Careens Lower

ZEW financial experts cut their assessment of current conditions in the German economy and chopped their expectations as well. Expectations were cut by 10.2 points while the current situation index was slashed by 12.3 points. These are substantial drops. The future index drops by more month-to-month only 17% of the time. The current index drops by more month-to-month less than 9% of the time. Expectations fell sharply for two consecutive months and that cumulative drop has been larger only 9% of the time.

4. European Car Registrations Continue to Surge Higher Year-over-Year

The auto sales recovery has been able to carry both Europe and the U.S. to the recoveries they currently enjoy. But... can these sales continue on the torrid path they have had? Will slowing in auto sales slow retailing in general or will it be an opportunity for retail funds to matriculate into other sectors? Finally, will the problems with Volkswagen continue to significantly affect Germany?

5. ECB's Nowotny calls for new instruments to boost growth, inflation / Too early to talk of QE extension

"The ECB is using monetary policy instruments available but in my view it's quite obvious that ... additional sets of instruments are necessary. These include structural measures ... but also on the demand side of the economy and also on the institutional factors of the economy."

→ Nothing special is expected in ECB meeting this week...
→ Key theme for next year? Structural reform and fiscal expansion?
→ Set scenarios for investment strategies...!

6. In UK, CPI lowered -0.1% in September from previous month's +0.2%... and, jobless claims in September increased +4.6K despite the expectation of increase...

7. But, weekly earnings number was 2.8% suggesting somewhat solid growth...

→ mixed signals... in line with moderate improvement... but it's ahead of Brexit problem...