With the US off today, due to Thanksgiving, Germany and the UK are left to ensure a steady flow of numbers for the data-hungry with IFO and UK GDP the main releases. German GDP was released earlier this morning and showed an increase in the third quarter.
German economy accelerates - for now: The revised third quarter report confirms that GDP rose to 0.5 percent quarter-on-quarter (QoQ) from 0.3 pct. a quarter earlier to take the annual increase to 2.6 pct. The components are a mixed bag with private consumption up a healthy 0.8 pct., but government spending likewise rose robustly (+0.6pct.). This means that government spending is up 1.3 pct. for the year so far while private spending can only manage 0.7 pct. Exports and imports rose at about the same pace (+2.5 pct. and +2.6 pct.) while capital investment rose (+0.9 pct.), but construction investment declined (-0.7 pct.).
German economy set to continue to slow down: The third quarter GDP report is, of course, already old news, but the IFO attempts to make up for the untimely GDP report with a very timely November report today, which is expected to show that the economy - both present and future - is slowing down, albeit only midly according to consensus forecasts. Consensus looks for the composite index (IFO Business Climate) to decline to 105.2 driven by expected declines in both IFO Current Asseessment and IFO Expectations.
UK economy to equal the German in 3Q? The revised UK GDP report is also up for grabs today with consensus looking for an unchanged 0.5 pct. increase in the third quarter. The much talked about austerity measures in the UK seem not to have affected overall government spending too much yet with consensus forecasting a 0.5 pct. growth rate, which results in a three-quarter growth of 2.4 pct.; so much for austerity! Private consumption is expected to grow a more leisurely 0.2 pct. while gross fixed capital formation is expected to rise 1.1 pct.
There is little else out of Europe (and as mentioned nothing from the US) today, but for a couple of CBI numbers at 12:00 GMT while Chancellor Merkel, President Sarkozy and Prime Minister Monti will meet in Strasbourg
