EURO ZONE

摘要

Mario Draghi warned of a more extended slump in economic growth for the Euro area than had been expected even a few months' ago. Draghi's speech to EU parliamentarians on September 23 has been reinforced by recent data. Industry is weakening: September's PMI for manufacturing dropped further into negative territory, largely on the back of German weakness. Brexit and trade uncertainties, which are gathering pace, have not helped. Surprisingly, after disappointing outturns for German and French production in August, the Euro zone managed to buck the trend with a modest +0.4% (m-o-m) rise in industrial output. However, this follows a -0.4% fall in July and -1.5% decline in June. On a y-o-y basis, the contraction in Euro zone production deepened to -2.6%. In Germany, poor export demand for autos meant that the y-o-y decline in production stood at -4%. Our Euro production outlook has worsened noticeably this month. This also raises concerns over the diminishing impact of ECB QE in supporting non-financial business activity.