David J. Powell 
The Trader’s Guide to the Euro Area [PDF ebook] 
Economic Indicators, the ECB and the Euro Crisis

Acknowledgements ix
CHAPTER 1
Introduction 1
CHAPTER 2
Gross Domestic Product 5
The Expenditure Approach 5
The Output Method 10
The Income Method 11
GNP vs. GDP 11
Release Schedule 12
Trend Growth 15
The Business Cycle 16
Monetary Conditions Index 19
Effects of Monetary Policy on GDP 19
Effects of the Exchange Rate on GDP 21
Exchange-Rate Defl ators 23
CHAPTER 3
Coincident Indicators 27
PMI Surveys 27
Industrial Production 31
CHAPTER 4
Leading Indicators 35
Financial Conditions Index 35
The U.S. Business Cycle 38
ZEW Survey 39
Ifo Survey 41
M1 Money Supply Growth 52
CHAPTER 5
Inflation Measures 57
Consumer Price Index 57
Producer Price Index 63
Labor Costs 65
Money Supply 68
Inflation Expectations 76
CHAPTER 6
The European Central Bank 83
Traffic Light System 86
Mandate 88
Two-Pillar Strategy 90
Monetary Policy Implementation 91
Intervention in the Currency Markets 93
Taylor Rule 95
CHAPTER 7
Other Institutions 101
Council of the European Union 101
European Parliament 102
European Commission 102
Ecofin 103
Eurogroup 103
European Council 104
CHAPTER 8
Euro Crisis 105
Origins 105
Optimal Currency Area Th eory 109
Fiscal Consolidation 111
Quantitative and Qualitative Easing 112
Government Bond Purchases 115
Measures of National Solvency 117
Target2 Balances 121
Resolution 123
Departure from the Euro Area 127
Tools for Analyzing Debt Sustainability 127
CHAPTER 9
Germany 133
Labor Market 133
Political Institutions 137
Political Parties 139
CHAPTER 10
France 143
CHAPTER 11
United Kingdom 145
The Bank of England 145
Quantitative Easing 153
GDP 155
Inflation Measures 157
House Prices 158
Political Institutions 164
CHAPTER 12
Switzerland 167
The Swiss National Bank 167
KOF Leading Indicator 168
CHAPTER 13
Sweden 171
CHAPTER 14
Norway 175
Bibliography 179
Index 197

David Powell (London, UK) is a Senior Economist at Bloomberg LP based in London where he writes the daily Bloomberg Brief on economic developments in Europe, as well as publish a weekly Bloomberg Currency Chart Book with analysis of foreign-exchange market, forecast macroeconomic variables for the euro-area and G-10 exchange rates, present views on the European economy and currencies to Bloomberg clients around the globe, write real-time analysis of European economic indicators for Bloomberg First Word, and discuss economic and financial market developments on Bloomberg TV. Prior to this David was a G-10 Currency Strategist, Vice President at Bank of America — Merrill Lynch where he forecasted G-10 FX rates with primary responsibility for Norway, Sweden, Switzerland, and the UK, presented the views of the currency strategy team to the European client base and internally, developed trade recommendations based on fundamental and technical analysis, contributed analytical pieces to the weekly and monthly publications of the global FX strategy group, wrote morning commentary on the currency markets and verbally delivered to the trading floor and analysed high frequency economic data for the FX traders and sales force. He holds a master’s degree from the London School of Economics, where he wrote his dissertation on the creation of monetary union in Europe, and a bachelor’s degree from New York University.