MNI Global Morning Briefing

Europe's data calendar sees several releases of note including the publication of French consumer spending and the final GDP print for Q3, both released at 0745GMT. At 0900GMT the release of Italian business and consumer sentiment will be closely eyed, while the publication the EZ ESI will be watched at 1000GMT.

French consumer spending seen up in October

Household expenditure in France declined by 5.1% in September following a sharp rebound after coming out of the first lockdown. September's decrease was led by a sharp drop of manufactured goods and food sales. In October, markets are looking for an uptick by 3.5% for monthly consumer spending, while annual expenditure is seen at 1.8%. Looking ahead, November spending is likely to remain subdued as the country entered the second lockdown. However, some of the decline might be offset by online purchases ahead of Christmas. Consumer confidence plunged to a two-year low in November, while the flash services PMI slipped to a six-month low, both boding ill with spending in the coming months.

Final French GDP forecast to register in line with the flash estimate

The final print of French economic growth is expected to register in line with the flash results showing an increase of 18.2% in Q3 after a record decline in the second quarter. However, annual GDP is still forecast to register negative reading of -4.3% in Q3. The flash report noted that all components of domestic demand recovered with household spending rising to an almost pre-pandemic level, while government spending was slightly above the pre-crisis level.

Italian consumer confidence seen lower

The Italian consumer and manufacturing sentiment are both projected to ease in November amid the rise of infection rates and new lockdown measures. Consumer confidence is seen at 99, down 3 points, while manufacturing confidence is forecast to drop 2.6 points to 93.0. Italian business sentiment ticked up slightly in October to 92.9, but it is likely to ease in November amid the deterioration of the pandemic.

EZ Economic Sentiment Indicator forecast to decline

The European Commission's Economic Sentiment Indicator is forecast to decrease slightly in November to 86.0, down from 90.9 recorded in October. The headline index remains below the pre-crisis level despite the continued recovery after the sharp drop in April. Amid the resurgence of Covid-19 cases and lockdowns in several European countries, both industrial and service sentiment are expected to deteriorate in November, although service sentiment is expected to take the larger hit. The recently released flash composite PMI for the Eurozone shifted back to contraction territory in November as business activity fell sharply.

The highlights of Friday's events calendar are speeches by ECB's Fabio Panetta and Isabel Schnabel as well as BOE's Silvana Tenreyro.