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 Data due in the coming week may offer further early signs of that
resilience with a series of consumer and business surveys, albeit
most largely carried out before the Nov. 13 shootings and suicide
bombings in the French capital that killed 129 people.
Markets have already rebounded.
Shares in airlines and hotel chains, including Air France-KLM
<AIRF.PA> and Accor <ACCP.PA>, tumbled when trading began on Monday,
but most recovered lost ground in the ensuing days. The STOXX
European 600 travel and leisure index <.SXTP> was up over the course
of the week, while the pan-European stock index <.FTEU3> hit a
three-month high on Thursday.
Economists say that consumer sentiment is the most likely casualty
of the sort of coordinated militant attacks seen in Paris, with
business confidence next in line.
However, morale among German analysts and investors this month
snapped a seven-month run of falls, the ZEW think tank survey showed
last Tuesday, even with 40 of the 225 responses coming in after the
attacks.
France's state statistics agency INSEE will release its monthly
business and consumer sentiment surveys on Tuesday and Wednesday
respectively and both are expected to be unchanged. Consumer
confidence in the euro zone's second largest economy dipped slightly
last month from September's eight-year high.
INSEE has said that its consumer survey will include only three days
of responses in the past week, representing around 7 percent of all
those surveyed. The bulk of business sentiment input will also be
from the two weeks preceding the attacks.
The full picture may only then emerge a month later.
Commerzbank chief economist Joerg Kraemer said that even the Sept.
11, 2001 attacks in the United States barely dented the U.S.
economy. "What we did see was that retail sales fell, only to
recover a month later," he said.
ING's chief euro zone economist, Peter Vanden Houte, said Paris
hotels, restaurants and tourist sites might feel a pinch, but the
overall short-term impact was likely to be muted.
More significant, he said, could be the longer-term effect of
increased security measures.
"There's a small positive in terms of government spending, but
there's a risk of hampering international transport and free
movement on goods and services. In economic terms, every euro spend
on more security is inefficient spending," he said.
"Could it push the ECB to loosen monetary policy? It's a further
headwind, but they have already indicated they will do something in
December."
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GERMAN MOOD, U.S. GROWTH
Beyond France, the coming week will kick off with flash purchasing
manager indices for the euro zone countries, Japan and the United
States, all seen broadly flat.
They showed in October that euro zone business activity picked up by
more than expected, U.S. industry growth accelerated and Japanese
manufacturing rebounded in a sign that they are shaking off the
Chinese economic slowdown.
Major indicators for China itself are not due until Dec. 1.
German business sentiment, to be revealed by the Ifo institute on
Tuesday, is meanwhile expected to slip, including the expectations
component which rose to a seven-month high in September.
Sentiment appeared unaffected by the emissions scandal that rocked
Germany's largest carmaker Volkswagen <VOWG_p.DE>, but that has now
widened to include vehicles' carbon dioxide as well as nitrogen
oxide output.
"There may be more capture of the VW story. Will Ifo show an impact
on the rest of German industry or continue to indicate it is an
isolated matter?" Vanden Houte said.
Whatever the numbers, there seems nothing will steer the European
Central Bank from fresh stimulus measures at its Dec. 3 meeting,
with ECB President Mario Draghi saying on Friday that it was ready
to act to raise anaemic inflation.
By contrast, the U.S. Federal Reserve is widely expected to raise
interest rates for the first time in nearly a decade when its
policymakers meet on Dec. 15-16.
Members of its policy-setting committee say they will continue to
scrutinize incoming data, but the only data of note in a week
shortened by American Thanksgiving Day on Thursday will be the
second estimate of U.S. economic growth on Tuesday.
Economists see a revision to an annual rate of 2.0 percent in the
third quarter from the initial estimate of 1.5 percent from 3.9
percent in the second quarter. A drawdown of inventories was the
chief drag.
(Additional reporting by Leigh Thomas in Paris; Editing by Mark
Heinrich)
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