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Whither weather?

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  • The US weather impacts on the data have been negative, to date. Today's data should be positively affected by the weather, as the industrial production figures will be boosted by energy consumption. We forecast 0.3% growth.
  • Italy appears likely to get a new prime minister today (unelected, but that is not an issue in Italian politics). Renzi is set to take over - seen perhaps as a new attempt to bolster reform, but likely to be less able to command a convincing majority in the Senate.
  • French GDP was better than expected, at 0.8% yoy. This is good for France and helpful for the Euro area (as investors have tended to view France as a potential weak link). Italian GDP is likely to be negative, but the Euro area as a whole should have turned positive in Q4 2013.
  • Spanish inflation in the form of CPI is due, with the markets looking for a 0.2% yoy rate of growth. Deflation concerns around consumer prices seem to us to be misplaced. It is perhaps more important to pay attention to the impact of weak prices on nominal GDP.

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