ECB Executive Board member Yves Mersch said in an interview that the second coronavirus lockdown in European has been “much less growth-damaging and much more targeted “. Still there is an “increase in fragmentation”, with divergence between services and manufacturing sectors. Some countries are more exposed to the pandemic consequences.
Overall, it’s “difficult to maintain positive growth going into the fourth quarter”. Germany might achieve it but others not. But it’s “premature to conclude that will last into next year with consecutive quarters of negative growth.
On ECB’s policies, Mersch said recalibration could be rectification, “simply an extension “on the time axis” or “of the volume or the intensity”. A second approach is “more targeted, or more focused, or on the contrary consider now untested instruments, a theoretical possibility in an all encompassing discussion.”
Eurozone economic sentiment rose to 117.8, employment expectation rose to 113.6
Eurozone Economic Sentiment Indicator rose slightly from 117.6 to 117.8 in September, above expectation of 116.9. Employment Expectation Indicator rose 0.8 pts to 113.6, highest since 2018. Industrial confidence rose from 13.8 to 14.1. Services confidence dropped from 16.8 to 15.1. Consumer confidence rose from -5.3 to -4.0. Retail trade confidence dropped from 4.6 to 1.3. Construction confidence rose from 5.5 to 7.5.
EU ESI was unchanged at 116.6 while EEI rose 1 pt to 113.6 (highest since 2018). Amongst the largest EU economies, the ESI rose in Spain (+1.7), Germany (+0.8), the Netherlands and Poland (both +0.6), while it worsened in France (-1.3) and Italy (-0.9).
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