Softening likely in EC economic indicators for August

The current level of the economic confidence index in euro area (0.4 standard deviation higher than the long-term average of 100) is as expected.

It should be noted that consumer confidence and business confidence in the retail sector are higher relative to its long-term average (respectively 0.7 and 1.7 standard deviation above average), as consumers remain more buoyant than producers whereas the construction sector remains a drag, estimates Societe Generale.

Confidence in the services sector stands just 0.1 standard deviation above average, hence, there is room for improvement in the near term.

Following the small decrease in both the manufacturing and services flash PMIs for September released last week, a slight fall in the European Commission's confidence indicators is expected. A fall in the economic confidence indicator is liekly to 103.8 from 104.2 and similar decreases in the industry and services indicators, added Societe Generale.