Eurozone Industrial Production For September Will Surprise Downward

On Thursday, Eurostat will release the first estimate of Eurozone Industrial Prdoction (IP) for September. According to the Bloomberg consensus, on a MoM basis, Eurozone IP is expected to increase by 0.6%e (v +0.7% in August). Regional surveys and my proxies suggest that the consensus remains very optimistic.

1/ Most of regional surveys were already released and showed that IP contracted sharply in several countries:

Italy IP MoM: -5.6% v +7.4% prior

Ireland IP MoM: -4.9% v -15.5% prior

Portugal IP MoM: -3.8% v +10.4% prior

2/ It seems that countries which outperformed recently experienced a downward normalization in September, amplified by the first signs of virus resurgence. Using estimates from other countries, a drop can’t be excluded.