Eurozone’s economic confidence indicator seems to have improved in September

The European Commission’s economic confidence survey is expected to have recovered in September and is likely to indicate towards strong growth in the third quarter. The economic sentiment survey was subdued in August and was at odds with other survey evidence. According to a Societe Generale research note, the confidence survey is expected to partially recover in September, with the headline economic confidence indicator rising to 103.8 from 103.5.

Even if the services figure might have dropped a bit, improvements are expected from the other components. The consumer sentiment, which was released last week, rebounded as projected. Industrial sentiment is also likely to rebound with last week’s flash PMIs for manufacturing looking quite sound.

Meanwhile, the business climate indicator is expected to rise as well following a decline in August. The survey is likely to indicate towards strong growth in the euro area in the third quarter, with an economic sentiment figure of 103.8 in line with GDP growth of just lower than 0.5 percent quarter-on-quarter, stated Societe Generale.

On the other hand, Spain is set to release its HICP inflation data tomorrow that is likely to show certain improvement in September. The nation’s inflation is expected to have rebounded noticeably to 0.2 percent year-on-year in the month, the first positive reading since June 2014, noted Societe Generale. The energy component is expected to have added around 40 basis points to the headline figure, showing the presence of huge base effects in energy prices.

Meanwhile, core inflation is also expected to have rebounded, although slightly to 0.8 percent year-on-year. This is possibly due to a slight rebound in both services and non-energy industrial goods prices. Spain’s HICP inflation is expected to keep on improving at a rapid pace, helped by base effects from energy prices and is likely to rise to around 1 percent year-on-year by the end of 2016, added Societe Generale.