WEEK IN REVIEW
The composite PMI indicator fell from 53.5 in May to 52.8 in June in the euro area. Though this number remains above 50 and therefore continues to point to an ongoing recovery in the euro area, this month’s decline also enhances its fragility. The weak recovery of the Euro Area is also reflected on the news of consumption and investment contraction in the French economy.
The ESI (Economic Sentiment Indicator) fell 0.6 points in the Euro Area after rising 0.6 points in May. This decrease is mainly justified by the deterioration in the confidence of Industry and Construction sectors and in Consumer confidence. In the countries’ breakdown, confidence declined in the core – in Germany (-1.0), France (-1.2) and Italy (-1.0). Periphery countries like Greece, Portugal and Spain reported an improvement of 4.6, 0.2 and 2.2, respectively.
In the US, the Federal Reserve’s efforts to support the economy are translating into higher inflation. The price measure tracked by the central bank rose 1.8%yoy in May, the biggest 12-month gain since October 2012.
In Angola, the BNA sold more USD in May as markets were alarmed with the shortfall in April. The BNA’s Governor calmed down markets, saying the Bank is now selling more USD after a reduction observed in the amounts sold in other markets, particularly in the oil sector. The BNA kept its main interest rates unchanged in the June’s meeting.
- Portuguese Industrial Production (May, National Statistics): Despite the drop in March, industrial production has evolved positively in 2014. May’s data will give us a better idea of Q2 GDP.
- Unemployment (May, Eurostat): The EA unemployment rate has been stable in the last few months. In Portugal, the Eurostat reported a significant drop in the unemployment rate in April to 14.6%, after 15.1% in Q1 2013. April’s decline may be due to Easter and May’s release show a small rise.
- Portuguese Investment Survey (1st semester, National Statistics): The recovery in investment is crucial to boost the economy. The survey regarding the first half of 2014 may shed some light on the main difficulties felt by entrepreneurs to invest more and eventually help policymaking on this issue.
- Portuguese CPI (June, National Statistics): June’s CPI will provide further data to see whether deflation is in fact materializing in Portugal.
- Portuguese International Trade in goods (May, National Statistics): After the decline both in exports and imports of goods revealed in April’s data, and the negative contribution from next exports in Q1 2014, May’s data may be important to provide a first glance on the direction of net exports’ contribution to Q2 GDP.