MARKET MOVER - BNP PARIBAS - Investment Services India

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Chart 15: Eurozone HICP Inflation
Frequency of revisions to flash estimate by 0.1pp or more since 2001
(to 1d.p.), by month
Final higher than flash
Final lower than flash
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sources: Reuters EcoWin Pro
Sep (f) Aug Jul Jun
HICP All Items (% y/y) 2.6 2.6 2.4 2.4
HICP All Items (% m/m) 0.7 0.4 -0.1 0.1
Key Point:
Tax effects should be broadly offsetting this month, and
we expect no change to the headline rate.
BNP Paribas Forecast: Stable
Eurozone: HICP (September)
Release Date: Friday 28 September
Inflation accelerated across the eurozone in August, primarily
as a result of rising fuel prices. The headline All Items rate
ticked up to 2.6% y/y from 2.4%, a level it had stabilised at for
the previous three months. Food price inflation was broadly
unchanged, while core price inflation fell 0.2pp to 1.5% y/y: the
first time core inflation had moderated since January.
September is typically a strong month for core prices,
although the balance of items going up in price versus those
being discounted as summer makes way for autumn means
greater potential for volatility and/or revisions of preliminary
estimates (see chart). On the one hand, clothing prices
should rise strongly as the sale of full-price autumn-winter
stock gets underway. New furnishings and household goods
should also boost core prices, as should annual educational
fee increases. Acting to push inflation down will be holidayrelated
goods and services, including airfares.
An additional unknown this month is the Spanish VAT hike,
which became effective on 1 September. Assuming that we
see most of the expected pass-through in the September
figures, we expect a 1.3pp boost to Spanish HICP inflation,
which would add 0.2pp to eurozone All Items HICP inflation
this month. This should broadly offset any downward
pressure from the Italian VAT hike of the previous September
dropping out of year-on-year comparisons, meaning core
inflation spends a second month at 1.5% y/y.
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Chart 16: French Retail Sales Breakdown
Indices
2005=100
Food
Cars
Total Retail Sales
Energy
90
Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan
08 09 10 11 12
Source: INSEE, Reuters EcoWin Pro
Volume (sa-wda) Aug (f) Jul (f) Jun Aug 11
% m/m -1.5 0.3 0.1 0.5
% y/y -1.2 0.7 0.2 0.5
Key Point:
Average sales for July and August are likely to be weak.
BNP Paribas Forecast: Weak
France: Retail Sales (July and August)
Release Date: Friday 28 September
As they are every year, French retail sales data for July
and August will be published together, as the data are
collected simultaneously in September. This should
provide us with a major piece of information for the Q3
GDP outlook on the day when the revised growth data for
Q2 are released (we expect a downward revision from
unchanged to -0.1% q/q).
The unpredictable weather, cold and rainy in July, warm and
sunny in August, may have caused some volatility in the
consumption of food and energy. The cut in taxes on petrol
may also have prompted some people to postpone refuelling
their cars until early September. Car registrations were poor
in both months, continuing the trend we have seen since the
start of the year. The Bank of France's retailer survey
suggests that demand for manufactured goods was relatively
strong in July, but very weak in August, as people were
keener to hit the shopping malls on rainy days.
Our forecast reflects this evolution, with a gain in July
followed by a collapse in August. For a fair assessment of the
economic situation, we should look at the average of the two
months, and this is likely to be weak, probably below the
2011 average.
Market Economics 20 September 2012
Market Mover
52
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