Surveys still fairly upbeat, little progress on integration

In our opinion, this week’s media coverage of the June EC and Ifo surveys was too downbeat. Both indicators are still consistent with annual GDP growth of over 2%. Other data told a familiar story of subdued underlying price pressures. Meanwhile, at this week’s European Council meeting, policymakers reached a preliminary agreement on managing migration from outside the bloc. But the plans were light on detail. What’s more, progress towards a euro-zone fiscal union seems glacial at best. Next week’s key data releases include German industrial production, which could add to concerns about a slowdown in the German economy.