As Europe grapples with another wave of lockdowns related to the pandemic the market will become more focused on the subsequent impact on the bloc’s economy. On December 31st, we get the first indication of the impact with the release of the EuroCOIN https://eurocoin.cepr.org/ , a coincident indicator of the euro area business cycle available in real time. The indicator provides an estimate of the monthly growth of Euro area GDP - after the removal of measurement error and seasonal factors.
In November the reading fell a significant amount to levels seen during the final stages of 2020 and is pointing to another significant slowdown in economic activity. The reading was impacted by deterioration in both business and consumer confidence, as well as the acceleration in production prices, especially energy, and the worsening outlook related to the latest outbreak of the pandemic.
The situation has deteriorated further since the last reading with new government-imposed lockdowns across Europe likely to impact economic activity further.
The reading on December 31st will give the market an early glimpse into how much newly imposed restrictions will impact the latent recovery in Europe.
