Euroarea economy likely to expand 0.4 pct sequentially in Q4, says Barclays

Industrial output of euro area rose sharply in November, coming in more than market expectations. Industrial production grew 1.5 percent sequentially, in line with a marked positive carryover of 1.2 percent for the fourth quarter of 2016 following 0.5 percent in the September quarter.

“We have thus raised our euro area Q4 GDP growth forecast by 0.1pp to 0.4 percent q/q for Q4 16, reflecting upward revisions in the big four countries”, said Barclays in a research report.

Italian and German fourth quarter economic growth is likely to come in at 0.4 percent and 0.2 percent respectively. Spanish economy is expected to expand 0.8 percent sequentially in the fourth quarter and 0.5 percent in France. Moreover, these had data confirm the upbeat signal received from the recent business survey such as EC and PMIs. In turn, barring a solid negative correction in January/February confidence, implies marked upside risks to the first half of 2017 growth outlook of euro area and also to the anticipated revised 1.3 percent annual growth of 2017, added Barclays.

At 07:00 GMT the FxWirePro's Hourly Strength Index of Euro was slightly bearish at -57.3353, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -84.2663. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex