Germany’s Ifo sentiment index is the big data release of the day and is forecast to continue its upward trajectory after the country’s PMI survey on Monday showed the private sector growing at its fastest rate since January.
Surveys have been strong through the last quarter, putting a question mark over the downbeat European Central Bank and German government forecasts for the second half of the year. The currency bloc as a whole looks set to pretty much replicate its 0.3 percent growth in the second quarter, nothing spectacular but a sign that recession is probably a thing of the past. The German economy rebounded strongly in the second quarter, growing by 0.7 percent. It might not quite match that in Q3 but it may not be far off.
After the Federal Reserve took its finger off the trigger, emerging markets have enjoyed some welcome respite. Hungary’s central bank meets today having cut interest rates by just 20 basis points in August, ending a run of successive quarter-point cuts stretching back into last year.
With no short-term pressure on the forint, central bankers have been talking about a further 10-20 bps cut and they have already announced that they will pump up to 2 trillion forints into the economy to provide cheap loans to businesses.
On the other side of the ledger, the government of Viktor Orban is intent on helping the many Hungarians with foreign currency mortgages with a relief scheme that will impose big losses on the banks. Deputy Economy Minister Gabor Orban, speaking at the Reuters Russia/CEE summit, could have some interesting things to say. We also interview the finance ministers of Russia, Bulgaria and Serbia.