Survey Shows Economic Forecasts for the Euro-Zone Stabilized Post Brexit
- Euro-Zone GDP forecasts almost completely unchanged throughout the forecast horizon
- Euro-Zone CPI forecasts lowered slightly in the short term
- Survey joins a number of other indicators suggesting that Brexit worries have eased in the Euro-Zone
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According to a survey released by Bloomberg, economists’ forecasts for the Euro-Zone were little changed in August.
The survey by Bloomberg News from August 5 to August 12 signaled that the likelihood of a recession in the Euro-Zone is seen at 15% (median estimate) versus 13% in July.
GDP forecasts for the Euro-Zone were almost unchanged throughout the forecast horizon, with only one minor revision to the downside in the Q2’17 year-on-year figure to 1.2% from the prior 1.3%.
According to the survey the Euro-Zone will expand 0.3% in 3Q’16.
The Euro-Zone’s CPI forecast was revised slightly lower in the short term with the most significant revision in Q1’17, which is expected to print 1.3% from the prior 1.5%.
With that said, average CPI is expected to print 0.3% in 2016, 1.3% in 2017 and 1.6% in 2018, all unchanged from the prior report.
According to this estimate the ECB will fail to reach their inflation target throughout the forecast horizon.
ECB’s benchmark rate is expected to remain at 0.0%.
This latest survey joins a number of more high profile measures (such as Sentix, Markit PMIs and Euro-Zone confidence figures) indicating that the initial scare from Brexit fallout (at least when it comes to economic indicators) have eased somewhat and perhaps even stabilized after the prior report in July indicated a sharp downgrade in forecasts.
Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing that about 39.2% of traders are long the EUR/USD at the time of writing.
You can find more info about the DailyFX SSI indicator here.
EUR/USD Daily Chart: August 15, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.