Eurweekly

8/8/2019 Eurweekly

1/8Important disclosures appear at the back of this document

European Weekly AnalystIssue No: 10/41

November 25, 2010 Goldman Sachs Global Economics,Commodities and Strategy Research

at https://360.gs.com

Recovery forges ahead; peripheral risks linger

Happy Thanksgiving! In the spirit of the

holiday season, this edition of the European

Weekly Analyst is an abbreviated version

focusing on the events in Europe this week.

This was quite an eventful week in Europe.

Fiscal uncertainty heightened as markets

awaited the full details of the Irish bail-out

package and the governments plan to

consolidate the public finances. The

governments efforts to improve the fiscal

position were announced yesterday in the

form of a four-year National Recovery Plan

which, as broadly expected, involves an

expenditure-heavy consolidation effort worth

15bn. With the spotlight on the Euro-zone

periphery, market scrutiny of Spains fiscal

situation also intensified. To address some of

the issues stemming from the fiscal

developments in Spanish regions, a

commitment to release regional quarterly

budget data was announced. At the same

time, data released on the budget execution

in Spain was encouraging.

On the data front, the business surveys across

the Euro-zone surprised on the upside. The

PMIs for both the manufacturing and service

sectors increased noticeably, and the German

IFO surged to an all-time high. These figures

confirm the strength of the current recoveryand suggest that momentum in Q4 may turn

out to be even stronger we had expected.

In the northern part of Europe, Norwegian

Q3 GDP growth came in at +0.9%qoq,

epitomising the weight of momentum in the

region. In neighbouring Sweden, the

KI/NIER Economic Tendency Survey

showed a large, unexpected increase in

November, matching its record ten-year high.

Nick Kojucharov

[email protected]

+44 (0)20 7774 1169

Adrian Paul

[email protected]

+44 (0)20 7552 5748

EditorLasse Holboell W. [email protected]

+44(0)20 7774 5205

-4.5

-3.5

-2.5

-1.5

-0.5

0.5

1.5

00 01 02 03 04 05 06 07 08 09 10

% qoq

Survey-based GDP indicator in Swedentracking +1.2%qoq growth in Q4

Real GDP

GDP indicator (based onPMI and NIER survey)

Source: Silf/Swedbank, KI/NIER, GS Gl obal ECS Research

-2.8

-2.3

-1.8

-1.3

-0.8

-0.3

0.2

0.7

1.2

98 99 00 01 02 03 04 05 06 07 08 09 10

%, qoq PMI-based indicator signals GDP growth of+0.6%qoq in Q4

Actual GDP

Survey-based coincident Indicator

Source: Euros tat, GS Global ECS Research

8/8/2019 Eurweekly

2/8November 25, 2010Issue No: 10/41 2

European Weekly AnalystGoldman Sachs Global Economics, Commodities and Strategy Research

Week in review

Business surveys: Reaccelerating in Q4After moderating throughout Q3 (in line with the

slowdown in GDP growth we also observed), business

surveys across the Euro-zone have shown renewed

momentum in Q4, and are signalling clear upside risk to

our GDP forecasts for the end of the year.

The exemplar of this was the November PMIs, where

gains were broad-based across both sectors and countries.

The Euro-zone manufacturing index rose from 54.6 to

55.5, underlined by a 2.3 surge in the French component

(which now stands at a 10-year high), and reflecting an

improvement in both New Orders and Output. The

services counterpart also clocked up a sizeable increase

from 53.3 to 55.2, as all three major subcomponents

New Business, Outstanding Business and Expected

gained further ground, suggesting increasing confidence

among services firms about the sustainability of the

recovery. Finally, the employment indices in both sectors

showed further improvement, and continue to confirm

the stabilisation in labour markets we have seen across

the core Euro-zone countries, particularly in Germany,

where the employment recovery is already well-entrenched.

In the regional surveys, larger-than-expected gains in

November were also consistent with a resurgence in

business activity. The German Ifo climbed from 107.5 to

109.3, and the continuing improvement in the forward-

looking expectations component (from 105.2 to 106.3)

suggests that this renewed momentum is unlikely to be

let up anytime soon. Italian business confidenceas

measured by the ISAE surveyalso recorded an

increase from 100.1 to 101.6, and bodes well for a pick-

up in Italian growth in Q4 after a somewhat sluggish

+0.2%qoq pace of expansion in Q3.

All in all, this latest survey data is consistent with Euro-

zone GDP growth of +0.6%qoq in Q4, higher than our

official forecast of +0.3%qoq (Chart 1).

Ireland clarifies new budget strategyThe Irish government revealed the full details of its four-

year budget plan this week. The overall magnitude of the

consolidation over this period effort remains unchanged

at 15bn, but it has now been specified that 10bn of this

will be achieved through expenditure cutswhich,

among other things, include a reduction in the minimum

wage and public-sector salarieswhile the remainder

will rely on revenue-boosting measures such as an

increase in the VAT rate from 21% to 23%.

Assuming these measures are implemented, the

government will be faced with roughly 65bn of

financing requirements over the next year, and although it

remains to be seen exactly how much of this will be

funded by the IMF/EU assistance package currently

being designed, press reports suggest that funding of the

order of 80bn-100bn will be provided. This should be

sufficient to cover both the deficit and debt service

obligations of the government, as well as the cost of

recapitalising the banking system (which we think the

government had slightly overestimated in the first place

seeEuropean Weekly Analyst10/40).

Spain makes progress on existing targetsOctober budget execution data for Spain showed that thebudget deficit reduction planned for this year remains

broadly on track at the central government level

through the first 10 months of this year, the deficit is 47%

lower than at the same juncture last year. Most of this is

on account of higher revenues (up 26% through October),

although expenditure reductions (-3% through October)

have also contributed somewhat. Where the uncertainties

continue to lie is in the extent to which this consolidation

effort has been coordinated across the different layers of

government. This is particularly important in the case of

Spain because sub-central government entities account

The Euro-zone periphery remained in the spotlight this week, as markets awaited the full details of the Irish

bail-out plan and the governments fiscal consolidation strategy. The latter component was announced

yesterday in the form of a four-year National Recovery Plan, which, as broadly expected, involves an

expenditure-heavy consolidation effort worth 15bn. Market scrutiny of Spains fiscal position also intensified

this week, but October data on the governments consolidation progress was more encouraging than worrying,

and was complemented by a commitment to release more frequent and timely updates on the finances ofregional authorities, which currently pose the greatest risk to the austerity drive. On the data front, the business

surveys across the Euro-zone surprised to the upside, not only confirming the strength of the current recovery,

but also suggesting that its renewed momentum in Q4 may turn out to be stronger we had expected.

-2.8

-2.3

-1.8

-1.3

-0.8

-0.3

0.2

0.7

1.2

98 99 00 01 02 03 04 05 06 07 08 09 10

%, qoq Chart 1: Survey-based indicator points toGDP growth of 0.6%qoq in Q4

Actual GDP

Survey-based coincident Indicator

Source: Eurostat, GS Global ECS Research

8/8/2019 Eurweekly

3/8November 25, 2010Issue No: 10/41 3


for nearly 50% of the total spending of the general

government sector.

Until now, we have only had annual data on the budget

performance of these entities, but after a meeting of the

regional finance ministers yesterday, it was decided that

quarterly updates will be published beginning next year

(see box). More important, however, was the disclosurethat through Q3, the majority of the regions were on track

to meet their respective deficit targets, although a select

few are at risk of deviating slightly. It would therefore

not come as a major surprise to us if the general

government missed its 2010 deficit target of 9.3% by a

few tenths of a percentage point; indeed, we have already

factored in the likelihood of some slippages, and have,

for some time, been projecting that the general

government deficit would end up closer to 9.6% of GDP

this year.

A miss of such a small magnitude is not cause for major

concern, in our view, although regional governments will

likely continue to pose risks to the consolidation effort.

Regional elections are set for May of 2011, and we would

not expect the regional authorities to engage in any major

belt-tightening until then, meaning either that the central

authorities will have to overcompensate, or that there will

be a scramble to push through expenditure cuts in the

second half of the year.

Strong signs from ScandinaviaSigns of economic activity continued their recent strength

in Sweden and Norway this week. The NIER Economic

Tendency Survey in Swedena close coincident tracker

of aggregate output growthincreased sharply in

November, matching its record ten-year high. At more

than one standard deviation above average, the NIER

Survey, combined with a Swedish PMI above 60,

remains consistent with GDP growth of around

+1.2%qoq in Q4.

In neighbouring Norway, official estimates of Q3 GDP

were in line with expectations: mainland output grew by

a strong +0.9%qoq, verifying the robustness of Norges

Banks key Regional Network Survey released last

month. Taken together, the combination of the survey

and official evidence in Sweden and Norway reinforcethe continued outperformance of northern Europe, despite

the travails of the south.

Nick Kojucharov and Adrian Paul

Spain has received an increased level of attention

following the fiscal and financial developments in

Ireland, and a key issue remains the fiscal position of the

Spanish regions. In a press conference yesterday at the

Ministry of Finance, it was announced that:

1) Of the 17 regions, just three (Madrid, Galicia and La

Rioja) met the target (deficit < 0.75% of GDP) set for

2009. The others had deficits larger than 0.75%1.9%

on average.

2) In light of final data for H1 and provisional data for

Q3, Economic and Finance Minister Salgado also

announced that the local authorities were running a

deficit of 1% of GDP at the end of H1 and are very

likely to meet their end-of-the-year target (deficit of

2.4%), although with some variation across the regions.

Two regions (Murcia and Castilla-La Mancha,

totalling 6% of GDP) face significant risk of notmeeting their targets.

Four regions (Galicia, Valencia, Canarias, Castilla y

Len, totalling 24% of GDP) might slightly deviate

and have already presented measures to correct this

before the end of the year.

The remaining 11 regions (70% of GDP) will meet

their targets and face no risk of not doing so.

In addition, after several weeks of discussion, the

regions have agreed to report budget execution data on a

quarterly basis, starting in 2011Q1. To the best of our

understanding, they will report the data in a unified

document using comparable methodology. However,

publication of this data is likely to be released with a

two-month lag, making it unlikely that we will see any

official data (apart from information provided in a press

conference like yesterdays) until May-June 2011. It is

also worth noting that elections in 13 regions will be

held in May 2011. The consolidation of regional

finances is likely to remain muted until after these

elections.

Jos Abad*

Spanish regions to publish budget execution data on a quarterly basis

* Jos Abad is an intern who is currently studying for his PhD in Economics at the University of Frankfurt.

8/8/2019 Eurweekly

4/84


November 25, 2010Issue No: 10/41

Weekly Indicators

After having peaked in the immediate aftermath of the

financial crisis, the GS Euroland Financial Conditions

Index has eased significantly. Roughly half of this easing

can be explained by the fall in corporate bond yields.

The drop in short-term rates and the decline in the realtrade-weighted Euro account for the bulk of the

remaining easing, with developments in equity prices

playing a limited role. Over the past two months, the real

appreciation of the Euro has led to a mild re-tightening

of financial conditions.

Euro-zone data releases surprised to the upside in

October, and the longer-term trend of our Euro-zone

surprise index has now been firmly positive for the past

eight months.

-1.0

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

05 06 07 08 09 10

avgstd. dev.

Euroland Surprise Index*(weighted)

Surprise Index

3-Mth mov Avg

*excluding US non-farm payrollsSource: GS Gl obal ECS Research

IndicatorLatest

ReadingMonth

Consistent with

(qoq) growth of:

Services PMI 55.2 Nov 0.5

Composite PMI 55.4 Nov 0.6

German IFO 109.3 Nov 1.5

Manufacturing PMI 55.5 Nov 0.8

French INSEE 100.0 Nov 0.4

Belgian Manufacturing -2.3 Nov 0.6

EC Cons. Confidence -10.9 Oct 0.4

EC Bus. Confidence 0.5 Oct 0.7

Italian ISAE 101.6 Nov 0.9

Weighted* Average 0.7

* Weights based on relative correlation co-eff icients

85

90

95

100

105

110

115

120

125

130

99 00 01 02 03 04 05 06 07 08 09 10 11

Index:1999=100 Real Euro TWI

Source: GS Glo bal ECS Research

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

99 00 01 02 03 04 05 06 07 08 09 10 11

Euro/US$

Source: GS Gl obal ECS Research

97

98

99

100

101

102

103

99 00 01 02 03 04 05 06 07 08 09 10 11

Index: Jan1999=100 Euro-zone financial conditions

Source: GS Glo bal ECS Research

Easier conditions

8/8/2019 Eurweekly

5/85



GS Leading Indicators

Our capital expenditure indicator points to moderating

investment growth.

Our consumption indicator suggests subdued

consumption growth.

The GS trimmed index indicates that core CPI has

troughed.

Our labour market model suggests improving

employment prospects.

Our leading indicator of IP is signalling a stabilisation of

industrial momentum.

Our survey-based GDP tracker now points to a

+0.6%qoq expansion in Q4.

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

99 00 01 02 03 04 05 06 07 08 09 10 11

%, qoq Euro-zone GDP and survey-based indicator

Actual GDP

Coincident Indicator


-12

-10

-8

-6

-4

-2

0

2

4

98 99 00 01 02 03 04 05 06 07 08 09 10 11

% qoq Euro-zone industrial production andour leading indicator

IP, 3m/3m

Leading indicator

Source: Euro stat, Ifo, Markit, GS Global ECS Research

-1.0

-0.5

0.0

0.5

1.0

1.5

99 00 01 02 03 04 05 06 07 08 09 10 11

%,qoq Euro-zone private consumption andcoincident indicator

Actual private consumption

Coincident indicator

Sorce: Euro stat, GS Global ECS Research

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

99 00 01 02 03 04 05 06 07 08 09 10 11

%qoq Euro-zone fixed investment andcoincident indicator

Actual Capex


Source: Euro stat, GS Global ECS Research

-1.0

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

98 99 00 01 02 03 04 05 06 07 08 09 10 11

% qoq Euro-zone employmentand coincident indicator

Actual em ployment


Source: Euro stat, Markit, Labour office, GS Global ECS Research.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

99 00 01 02 03 04 05 06 07 08 09 10 11

%yoy Euro-zone CPI core and trimmed index

Core CPI

GS trimmed index


8/8/2019 Eurweekly

6/86



Interest Rate Forecasts

% 3-Month Horizon 6-Month Horizon 12-Month Horizon

Current Forward Forecast Forward Forecast Forward Forecast

Euroland 3M 1.0 1.1 1.0 1.2 1.1 1.4 1.8

10Y 2.6 2.7 2.4 2.8 2.7 2.9 3.3

UK 3M 0.7 0.8 0.7 0.8 0.8 1.0 1.3

10Y 3.3 3.4 3.1 3.5 3.3 3.7 3.8

Denmark 3M 1.2 1.3 1.3 1.4 1.7 1.7 2.2

10Y 2.7 3.0 3.7 3.1 3.8 3.2 4.1

Sweden 3M 1.6 1.6 1.6 1.8 2.1 2.1 3.110Y 2.9 2.9 2.7 3.0 3.0 3.1 3.5

Norway 3M 2.5 2.5 2.7 2.5 2.9 2.7 3.6

10Y 3.5 3.5 3.8 3.5 4.0 3.6 4.5

Switzerland 3M 0.2 0.2 0.8 0.2 1.3 0.3 2.3

10Y 1.5 1.6 1.7 1.6 2.0 1.7 2.5

Poland 3M 3.8 4.2 4.3 4.5 4.6 4.9 5.0

5Y 5.4 5.4 5.8 5.5 5.9 5.7 6.1

Czech 3M 1.2 1.3 1.3 1.4 1.4 1.8 2.3

Republic 5Y 2.6 2.7 3.1 2.8 3.2 3.2 3.5

Hungary 3M 5.4 5.6 5.4 5.8 5.6 6.0 6.5

5Y 7.1 7.4 6.7 7.5 6.8 7.7 6.9

Euroland-US 10Y -18 -18 -11 -20 -7 -25 -3

Close 22 November 10, mid-rates for major markets. We are currently us ing March 2011, June 2011 and December 2011 contracts for 3-month forward rates.

Main Economic Forecasts

GDP Consumer Prices Current Account Budget Balance

(Annual % change) (Annual % change) (% of GDP) (% of GDP)

2009 2010(f) 2011(f) 2009 2010(f) 2011(f) 2009 2010(f) 2011(f) 2009 2010(f) 2011(f)

Euro-zone -4.0 1.7 1.8 0.3 1.5 1.5 -0.7 0.1 0.5 -6.3 -6.1 -4.8

Germany -4.7 3.1 2.4 0.2 1.1 1.5 5.0 4.3 3.4 -3.1 -3.6 -2.8

France -2.5 1.6 2.1 0.1 1.7 1.6 -2.0 -1.6 -1.1 -7.5 -7.7 -6.3

Italy -5.1 1.2 1.5 0.8 1.6 1.8 -3.2 -2.8 -1.8 -5.3 -4.9 -3.8

Spain -3.7 -0.4 1.1 -0.3 1.6 1.1 -5.4 -3.6 -2.0 -11.1 -9.6 -7.3Netherlands -3.9 2.0 2.0 1.0 0.9 1.2 5.0 5.5 5.6 -4.9 -5.6 -4.1

Greece -2.0 -3.8 -2.4 1.3 4.7 2.6 -11.4 -7.8 -3.5 -13.6 -8.4 -7.6

UK -4.9 1.8 2.5 2.2 3.0 2.8 -1.3 -0.3 0.5 -7.5 -8.1 -6.3

Switzerland -1.9 2.7 1.7 -0.5 0.7 0.8 7.4 8.1 8.6 0.2 -0.4 -0.3

Sweden -5.1 4.3 3.1 -0.3 1.0 2.2 7.4 8.1 9.1 -0.5 -3.4 -2.5

Denmark -4.7 1.8 2.4 1.1 2.1 2.1 3.5 1.2 1.4 -2.0 -4.7 -4.3

Norway* -1.5 1.7 3.1 2.2 2.5 2.1 13.8 17.2 17.9

Poland 1.8 3.2 4.4 3.5 2.4 2.5 -1.6 -3.6 -4.3 -7.1 -6.3 -5.0

Czech Republic -4.0 2.1 2.8 1.0 1.7 2.5 -1.0 -0.8 -0.9 -5.9 -5.4 -5.6

Hungary -6.2 1.2 2.7 4.2 4.9 3.3 0.2 0.5 -1.3 -4.0 -4.2 -4.1

*Mainland GDP growth

Quarterly GDP Forecasts

% Change on

Previous Quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Euro-zone -2.5 -0.1 0.4 0.2 0.3 1.0 0.4 0.3 0.4 0.5 0.5 0.5

Germany -3.4 0.5 0.7 0.3 0.5 2.2 0.7 0.3 0.5 0.6 0.6 0.6

France -1.5 0.1 0.3 0.6 0.2 0.7 0.5 0.5 0.5 0.6 0.5 0.4

Italy -2.9 -0.3 0.4 -0.1 0.4 0.5 0.5 0.4 0.4 0.3 0.3 0.2

Spain -1.6 -1.1 -0.3 -0.2 0.1 0.2 0.0 0.1 0.3 0.5 0.6 0.6

Netherlands -2.4 -1.2 0.6 0.6 0.5 0.9 0.6 0.4 0.4 0.5 0.5 0.6

Greece -1.0 -0.3 -0.5 -0.8 -0.8 -1.8 -1.1 -1.4 -0.5 -0.1 0.3 0.3

UK -2.3 -0.7 -0.3 0.4 0.3 1.2 0.4 0.6 0.2 1.1 0.8 0.8

Switzerland -1.0 -0.6 0.7 0.7 1.0 0.9 0.4 0.3 0.5 0.5 0.6 0.6

Sweden -2.9 0.6 0.4 0.5 1.5 1.2 0.7 0.7 0.8 0.8 0.8 0.8

Denmark -1.8 -2.2 1.0 0.2 0.7 1.0 0.4 0.5 0.6 0.6 0.7 0.7

Norway* -0.5 -0.3 0.4 0.5 0.2 0.5 1.0 1.0 0.6 0.7 0.7 0.8

Poland 0.4 0.5 0.7 1.2 0.7 1.1 0.9 0.8 1.1 1.2 1.3 1.2

Czech Republic -3.8 -0.5 0.5 0.5 0.4 0.9 0.6 0.5 0.6 0.8 0.8 0.9

Hungary -2.9 -1.3 -0.6 0.0 0.6 0.2 0.5 0.5 0.7 0.7 0.8 0.9

*Mainland GDP

20112009 2010

8/8/2019 Eurweekly

7/87



We, Lasse Holboell W. Nielsen, Adrian Paul and Nick Kojucharov, hereby certify that all of the views expressed in this report accurately reflect

personal views, which have not been influenced by considerations of the firms business or client relationships.

Global product; distributing entities

The Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs,and pursuant to certain contractual arrangements, on a globalbasis. Analysts based in Goldman Sachs offices around the world produce equity research on industries and companies, and research on macroeconomics, currencies, commodities and portfoliostrategy. This research is disseminated in Australia by Goldman Sachs & Partners Australia Pty Ltd (ABN 21 006 797 897) on behalf of Goldman Sachs; in Canada by Goldman Sachs &Co.regarding Canadian equities and by Goldman Sachs & Co. (all other research); in Hong Kong by Goldman Sachs (Asia) L.L.C.; in India by Goldman Sachs (India) Securities Private Ltd.; in Japan byGoldman Sachs Japan Co., Ltd.; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., Seoul Branch; in New Zealand by Goldman Sachs & Partners New Zealand Limited on behalf of GoldmanSachs; in Russia by OOO Goldman Sachs; in Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W); and in the United States of America by Goldman Sachs &Co.

Goldman Sachs International has approved this research in connection with its distribution in the United Kingdom and European Union.

European Union: Goldman Sachs International, authorized and regulated by the Financial Services Authority, has approved this research in connection with its distribution in the European Union

and United Kingdom; Goldman Sachs & Co. oHG, regulated by the Bundesanstalt fur Finanzdienstleistungsaufsicht, may also distribute research in Germany.

General disclosures

This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that we consider reliable, but we do not represent it isaccurate or complete, and it should not be relied on as such. We seek to update our research as appropriate, but various regulations may prevent us from doing so. Other than certain industry reports

published on a periodic basis, the large majority of reports are published at irregular intervals as appropriate in the analyst's judgment.

Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We have investment banking and other business relationships with asubstantial percentage of the companies covered by our Global Investment Research Division. SIPC: Goldman, Sachs & Co., the United States broker dealer, is a member of SIPC (http://

www.sipc.org).

Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desks that reflect opinions that arecontrary to the opinions expressed in this research. Our asset management area, our proprietary trading desks and investing businesses may make investment decisions that are inconsistent with the

recommendations or views expressed in this research.

We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities

or derivatives, if any, referred to in this research.

This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personalrecommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in thisresearch is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of investments referred to in this research and the incomefrom them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have

adverse effects on the value or price of, or income derived from, certain investments.

Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Investors should review current optionsdisclosure documents which are available from Goldman Sachs sales representatives or at http://www.theocc.com/publications/risks/riskchap1.jsp. Transactions cost may be significant in option

strategies calling for multiple purchase and sales of options such as spreads. Supporting documentation will be supplied upon request.

All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client websites. Not all research content is redistributed to our clients oravailable to third-party aggregators, nor is Goldman Sachs responsible for the redistribution of our research by third party aggregators. For all research available on a particular stock, please contact

your sales representative or go to www.360.gs.com.

Disclosure information is also available at http://www.gs.com/research/hedge.html or from Research Compliance, 200 West Street, New York, NY 10282.

No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of The Goldman Sachs Group, Inc.

Copyright 2010, The Goldman Sachs Group, Inc. All Rights Reserved.

8/8/2019 Eurweekly

8/88 November 25 2010Issue No: 10/41

European Calendar

Economic Releases and Other Events

Focus for the Week Ahead

Q3 GDP breakdown (Thursday). We already know

Euro-zone real GDP grew +0.4%qoq in Q3 and, judging

from the country-level details available so far, the full

expenditure breakdown should show another strongcontribution from domestic demand, with net exports

providing only limited support.

ECB Meeting (Thursday). We expect no change in

rates, but a new set of the ECB Staffs forecasts for 2010-

11 will be published, as well as the first projections for

2012. We think the Governing Council will also

announce a continued gradual withdrawal of

extraordinary liquidity provisions, which will include an

end to full allotment for any loan maturities longer than

one week.

Country Time Economic Statistic/Indicator Period EMEA-MAP

(UK) mom/qoq yoy mom/qoq yoy Relevance

Friday 26th Nov

Germany Consumer Prices - Provisional (nsa) Nov 0.1% +1.3% 0.1 +1.3%

Germany German states inflation figures Nov

France 07:45 Consumer Spending Sep +0.0% +1.5% 2

Hungary 08:00 Unemployment Rate Oct +10.9% 3

Euroland 09:00 M3 - 3m Average Oct +1.2% (3mma) +0.8% (3mma)

Switzerland 10:30 KOF Leading Indicator Nov 2.2 2.2 4

Monday 29th

Sweden 08:30 GDP Q3 +1.2% +5.2% +1.9% +4.6%

Sweden 08:30 Retail Sales Oct +0.8% +5.5% 3

Italy 09:00 Producer Prices Oct +0.2% +4.0% 0

Euroland 10:00 Business Confidence Nov 3.0 0.0 4

Hungary 13:00 Monetary Policy Meeting +5.3% +5.3%

USA 15:30 Dallas Fed Survey Nov 2.6

USA 22:30 GS Analyst Index Nov 57.7

Tuesday 30th

Hungary 08:00 Producer Prices Oct 0

Poland 09:00 GDP Q3 P +0.9%sa +3.7% +1.0%sa +3.5%

Norway 09:00 Retail Sales Oct +1.3% +3.0% 2

Italy 10:00 Harmonised CPI Nov - P +0.1% +2.1% +0.7% +2.0% 0

Euroland 10:00 Harmonised inflation flash estimate Nov +1.9% +1.9% 0

Euroland 10:00 Unemployment Rate Oct +10.1% +10.1% 5

USA 14:00 S&P Case Shiller Home Price Index, MoM Sep 0.28%

USA 14:45 Chicago Purchasing Managers' Index Nov 60.0 60.6

USA 15:00 Consumer Confidence Nov 50.2

Wednesday 1st Dec

Hungary PMI Manufacturing Nov 51.7

Sweden 07:30 PMI Manufacturing Nov 61.8 5

Poland 08:00 PMI Manufacturing Nov 55.6

Norway 08:00 PMI Manufacturing Nov 54.2 3

Switzerland 08:30 PMI Manufacturing Nov 59.2 4

Czech Republic 08:30 PMI Manufacturing Nov 57.2

Euroland 09:00 PMI Manufacturing Nov - F 55.5 55.5 5

USA 13:30 Non-Farm Productivity 3Q +2.6% +1.9%

USA 13:30 ADP Employment Change Nov 43,000

USA 15:00 ISM Survey Nov 57.0 56.9

USA 15:00 Construction Spending Oct +1.2% +0.5%

USA 19:00 Fed Beige Book Dec

USA 22:00 Domestic Motor Vehicles Sales Dec 9.1M 9.3M

USA 22:00 Lightweight Motor Vehicles Sales Nov 12.2M 12.3M

Thursday 2nd

Switzerland 06:45 GDP Q3 +0.9% +3.4%

Hungary 08:00 Trade Balance - Final Sep +EUR548.0m 1

Switzerland 08:15 Retail Sales Oct +4.1% 0

Euroland 09:00 GDP - Second Estimate Q3 +0.4% +0.4%

Euroland 12:45 ECB Meeting Nov unch unch

USA 13:30 Initial Jobless Claims

USA 15:00 Pending Home Sales Oct 1.8%

USA 16:00 GS Retail Index Nov +3.5%

USA 16:00 Treasury Announcement, 3, 10, 20-year Not

Friday 3rd

Norway 08:00 Unemployment Rate. Nov +2.7% 4

Spain 08:00 Industrial Production Oct +0.2% 2% 5

Switzerland 08:15 CPI Nov +0.2% 0

Euroland 09:00 PMI - Services Nov - F 55.2 55.2 5

USA 13:30 Civilian Unemployment Rate Nov +9.6% +9.6%

USA 13:30 Non-Farm Payroll Employment Nov 125,000 151,000

USA 15:00 Factory Orders Oct 1.5% +2.1%

USA 15:00 ISM Non-Manufacturing Survey Nov 55.0 54.3

Italy 10:00 Industrial Production May 0.50% 6.10% 1% 7.80%

Forecast Previous

Economic data releases are subject to chang e at short notice in calendar. Complete calendar available via the Portal https://360.gs.com/gs/portal/events/econevents/.

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.81.0

1.2

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.81.0

1.2

2009:Q3 2009:Q4 2010:Q1 2010:Q2

Domestic demand was the keyEuro-zone growth driver in Q2

Net exports

InventoriesFinal domestic demand

% change in real GDP (rhs)

Source: Euros tat

contribution togro wth (ppt)

%

Documents

Eurweekly