Eurozone 4Q growth likely to remain firm, broad-based improvement across the euro area to underpin

Euro area, the week ahead is packed with economic releases, including Q4 GDP and inflation figures. Survey indicators such as PMIs, Ifo and consumer confidence have suggested solid growth in Q4.

The data releases showed euro area industrial production surged by 1.5 percent m/m in November – driven by notable strength in France and the Netherland. New car registrations for December were firm, up by 2.1 percent y/y, or by 0.7 percent on a 3m/3m basis. Retail sales look set to be solid in 4Q

Meanwhile, surveys were also strong. The December euro area composite PMI was at its highest level since May 2011, led by the manufacturing sector. The EC economic sentiment index improved further on the lofty level seen in November to reach 0.7 standard deviations above average. The consumer sentiment indicator was especially strong, improving for the fourth month in a row to a 20-month high.

Societe Generale said both the hard data and survey evidence point to firm growth of 0.5 percent q/q. "We expect broad-based improvement across the euro area to underpin our forecast, with Germany, France and Spain all registering 0.6% GDP growth qoq in 4Q. Italy looks likely to be a notable drag – we expect 0.25% qoq, unchanged from the previous quarter." said Societe Generale in a report.