The latest thoughts in a note from CS
Euro Area: German & Eurozone ZEW
Consensus for the German ZEW survey expectations/current situation for September is set at 5.0/43.0, below the August print of 8.6/44.3. The Eurozone ZEW survey expectations will also be of interest, with a print of 23.7 in August.
We maintain a bearish bias on the euro, but believe further USD strength will be needed in order to push EURUSD lower from current levels.
We expect CPI inflation to remain stable at 1.6% y/y in August, slightly above consensus of
1.5% y/y. According to our forecasts, RPI for August will decrease from 2.5% yoy in July to 2.4%
yoy and RPIX from 2.6% yoy in July to 2.5% y/y in August, in line with consensus. Consensus for PPI Input/Output in August is set at -0.4% mom/-0.1%mom (previous: -1.6% mom/-0.1% mom).
We expect a very binary GBP response from Thursday’s Scottish referendum; our bias is to expect a ‘no’ victory. The prospect of extended political discussion following the vote leaves us neutral on GBP from here.