CE3 economic growth likely to slowdown in H2 2017 - Commerzbank

The June industrial activity data for the Czech Republic came in surprisingly weak on Monday. The headline industrial output came in weaker than expected at 2.2 percent year-on-year compared with consensus expectations of 7 percent. The output is expected to have dropped by around 2 percent month-on-month following a solid 3.4 percent sequential rise in May, noted Commerzbank in a research report. The data also indicates that while the auto sector, which powered the Czech manufacturing upswing over the past year and is still its most positive contributor, slowed sharply in June, which pulled overall growth down, stated Commerzbank.

Industrial output throughout the CE3 nations entered a marked upswing starting late last year, and this momentum accelerated through most of the first half of 2017. In this scheme of things, the second quarter was strong too. However, June has dampened the second quarter average. Unless this drop is powerfully reversed again in July, a slower growth phase for the region might be lurking.

Regional PMIs have been mildly pointing in this direction already. The June data reminds of the dangers of linear extrapolation in an upswing. According to Commerzbank, the GDP growth is expected to slowdown in the second half of this year.

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest