MARKET MOVER - BNP PARIBAS - Investment Services India

Key Data Preview
Chart 5: German Headline and Core CPI
Sources: Reuters EcoWin Pro
Sep (f) Aug Jul Jun
HICP (% m/m) -0.1 0.4 0.4 -0.2
HICP (% y/y) 2.0 2.2 1.9 2.0
CPI (% y/y) 1.9 2.1 1.7 1.7
BNP Paribas Forecast: Slowing Again
Germany: ‘Flash’ CPI and HICP (September)
Release Date: Wednesday 26 September
German consumer price inflation accelerated relatively
dramatically in August. The HICP index posted a 0.4% m/m
increase, driving annual inflation up to 2.2% y/y from 1.9% in
July. One of the key drivers was transport prices. Core
prices, meanwhile, only increased 0.2% m/m, leaving the
annual inflation rate unchanged at 1.2% y/y.
For the September prints, we expect a contraction of
0.2% m/m in core prices, mainly due to the end of the
summer season and its effect on leisure-related services
prices. That should, again, leave core inflation unchanged in
annual terms. Looking beyond that, we do not expect
significant changes in core inflation before mid-2013.
In September, we expect the effect on annual inflation of the
surge in transport prices to be partly offset in September, so
this should contribute less to the headline inflation rate than
in August. The headline HICP index should therefore contract
0.1% m/m and annual inflation should slow again to 2.0%.
Key Point:
The transport price surge in August should be partly
offset in September. Core price inflation should remain
unchanged.
Chart 6: French Household Confidence & Elections BNP Paribas Forecast: Weaker
115
110
105
100
95
2002
2007
1995
1988
1981
90
2012
85
Presidential
election
month
80
0 1 2 3 4 5 6 7 8 9 10 11 12
Source: Reuters EcoWin Pro
Index (sa) Sep (f) Jul Jun Sep 11
Overall (normalised index) 86 87.0 89.5 81.4
Buying opportunity
(diffusion index)
-28 -26 -20 -26
Key Point:
The post-election feel-good factor is likely to wane
further. The willingness to spend could fall to extremely
low levels.
France: Household Confidence (September)
Release Date: Wednesday 26 September
As usual, in France, there was no household confidence
survey conducted in August due to the summer holidays.
Consequently, we will have to compare the September data
with July’s result.
Back in March, when the French public realised that a
change of government was a sure thing, confidence soared.
The strongest gains were seen in surveys on future personal
financial situation and future nationwide standard of living.
These hopes have since been dashed and we expect a
further decline in both items.
Although confidence has been very low by historical
standards since the start of the year, we expect it to weaken
even more. The ECB’s bond-buying announcement and a cut
in the tax on petrol have probably not been sufficient to have
a material positive effect on confidence.
What’s more, the situation in the labour market has
worsened, according to the latest data, and all this is likely to
weigh on purchasing plans. At -28, the diffusion index of
willingness to make important purchases is expected to fall
very close to the lowest print of the last three-and-a-half
years, at -29.
Market Economics 20 September 2012
Market Mover
47
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