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Eurozone Industrial Production seen dropping 1.5% - ING

FXStreet (Łódź) - Martin Van Vilet from ING expects August Eurozone Industrial Production numbers to drop further, about 1.5% on a monthly basis.

Key quotes

"The national industrial production figures released last week clearly confirmed that the industrial recovery across the Eurozone has lost significant momentum."

"Industrial production (excluding construction) in Germany fell a significant 4.3% MoM in August – admittedly partly because of the timing of school holidays."

"Industrial output in France, meanwhile, was unchanged, while Italian output rose by only 0.3%."

"Production in Spain – which the IMF thinks will outpace Germany in 2015 (we are not so sure yet) – also rose by a modest 0.2%, and although production in the Netherlands saw a much stronger rise (+1.3%), this was solely due to a sharp rise in the erratic mining component."

"Taken together, the national data point to a decline in Eurozone aggregate production, due tomorrow, of around 1.5% MoM. That would more than reverse the 1.0% MoM increase seen in July, and even with some rebound in September, it thus seems likely that the industrial sector acted as a drag on GDP in the third quarter."

"If the PMI is anything to go by, the much larger services sector fared better and should have contributed positively to GDP growth."

"So we doubt whether the overall Eurozone economy contracted in 3Q. Indeed, for the time being we have pencilled in Eurozone GDP growth of 0.1% QoQ in 3Q. Such growth, however, clearly is much too low for comfort."

"Pressure on European policymakers to deploy further monetary and renewed fiscal stimulus, therefore, looks set to continue."

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