Euro area economy did not improve significantly in September-October, according to the leading composite indicator eurocoin published by the CEPR and Banca d'Italia.
- October growth reading stood at -0.29%, statistically indistinguishable from -0.32 and -0.33 recorded in September and August, respectively.
- October marks thirteenth consecutive month of contraction being signaled by eurocoin
- Crucially, 3mo MA is now at -0.313 which is the same as 2008-2009 average (-0.31). 6mo average is at -0.23.
- We are now into the fourth month of statistically significant sub-zero readings.
As charts below show, ECB remains in the operating range where inflationary target is not consistent with Taylor Rule target.
And here's a chart from Morgan Stanley Research showing PMI-based indicators are also pointing South: