GLOBAL MORNING BRIEFING: EZ Inflation, GDP To The Fore

Friday‘s data schedule is heavy with flash euro area GDP Q2 releases and the July flash CPI data.

Strong GDP prints and upside inflationary surprises will again put a 50bp hike for the ECB's September meeting in pole position. a hot inflation shock could, at a stretch, even put 75bp on the table. However, a weaker GDP read, alongside plunging consumer sentiment and weak PMIs could still have policymakers ready to stay their hand and only go 25bps.

All in all, the data could see big swings in ECB rhetoric over the summer.

France:

GDP (0630 BST): French GDP is expected to see minimal +0.2% q/q growth in Q2, up from the -0.2% q/q contraction of Q1.
CPI (0745 BST): HICP will likely continue to rise into July, up 0.2pp at +6.7% y/y and expanding by +0.2% m/m (slower then +0.9% m/m in June).

Spain:
GDP (0800 BST): A 0.2pp uptick to +0.4% q/q is anticipated for Q2.
CPI (0800 BST): Another jump in harmonised inflation is the expectation for Spain. HICP is seen at +10.5% y/y in July, accelerating by half a point. On the month, a stark slowdown could prove promising, with the forecast seeing -0.8% m/m, following +1.9% m/m in June.

Germany:

GDP (0900 BST): Germany Q2 GDP will likely plateau around +0.1% q/q, w 0.1pp slowdown from Q1.

Italy:
GDP (0900 BST): The Italian plateaueconomy is anticipated to have advanced by a modest 0.3% q/q in Q2, after all-but stalling at +0.1% q/q in Q1.
CPI (1000 BST): No relief is expected heading into July. HICP is forecasted to accelerate by 03pp to +8.8% y/y. Prices should cool on the month to -0.9% m/m following +1.2% m/m.

Eurozone:
GDP (1000 BST): Following euro area countries looking to all-but flatline in Q2, the aggregate eurozone print is projected to see minimal growth of +0.2% q/q , dipping from +0.6% q/q in Q1.
CPI (1000 BST): Eurozone CPI is expected to quicken modestly from +8.6% y/y to +8.7% y/y in July, hitting another fresh Euro-era high. Following yesterday’s upside surprise in German HICP, this print will also likely see a boost above consensus.

Other data points of interest today will be French consumer spending (0630 BST) which will likely see another substantial June contraction as inflationary concerns sees purse strings tighten. The German July unemployment report (0855 BST) will probably see further upticks in the unemployment change and a 0.1pp increase in the unemployment claims rate. This data contains Ukrainian nationals looking for work as of last month, accounting for higher unemployment and the underlying labour market remains tight.

In the EM space, the Turkish trade deficit (0800 BST) should narrow again whilst Mexican GDP (1200 BST) should see continued growth at +0.9% q/q and +1.5% y/y for Q2, only marginally softer than the previous readings.

Source: MNI / Bloomberg

Date	GMT/Local	Impact	Flag	Country	Event
29/07/2022	0530/0730	**		FR	Consumer Spending
29/07/2022	0530/0730	***		FR	GDP (p)
29/07/2022	0600/0800	**		SE	Unemployment
29/07/2022	0600/0800	**		DE	Import/Export Prices
29/07/2022	0630/0830	**		CH	retail sales
29/07/2022	0645/0845	***		FR	HICP (p)
29/07/2022	0700/0900	*		CH	KOF Economic Barometer
29/07/2022	0700/0900	***		ES	GDP (p)
29/07/2022	0700/0900	***		ES	HICP (p)
29/07/2022	0755/0955	**		DE	Unemployment
29/07/2022	0800/1000	*		NO	Norway Unemployment Rate
29/07/2022	0800/1000	***		DE	GDP (p)
29/07/2022	0800/1000	***		IT	GDP (p)
29/07/2022	0830/0930	**		UK	BOE Lending to Individuals
29/07/2022	0830/0930	**		UK	BOE M4
29/07/2022	0900/1100	***		EU	HICP (p)
29/07/2022	0900/1100	***		EU	GDP preliminary flash est.
29/07/2022	0900/1100	***		IT	HICP (p)
29/07/2022	0900/1100	***		EU	EMU Preliminary Flash GDP Y/Y
29/07/2022	1000/1200			IT	PPI
29/07/2022	1230/0830	***		CA	Gross Domestic Product by Industry
29/07/2022	1230/0830	**		US	Personal Income and Consumption
29/07/2022	1230/0830	**		US	Employment Cost Index
29/07/2022	1345/0945	**		US	MNI Chicago PMI
29/07/2022	1400/1000	***		US	Final Michigan Sentiment Index
29/07/2022	1500/1100			CA	Finance Dept monthly Fiscal Monitor (expected)